Retail Investor Trading in Europe: Perspectives on Trading Preferences, Behaviors, and Technology Adoption

by Alexander Camargo,  Isabella Fonseca, June 27, 2012
EMEA

Abstract

European self-directed investors have greater familiarity with advanced financial instruments such as futures, FX, commodities, and international equities than their North American counterparts. Online brokers can competitively position themselves by offering access to trading these instruments.

The second of two reports on the retail trading landscape, Retail Investor Trading in Europe presents a detailed picture of the online trading industry in Europe from the perspective of the retail investor. Starting in March 2012, Celent conducted a survey of retail investors across six countries: the United Kingdom, France, Germany, Switzerland, Italy, Spain, and Switzerland. The purpose of the study was to get an understanding of demographics, trading styles, product preferences, and levels of satisfaction among retail investors across all customer segments and affluence levels.

"The European investor community is incredibly diverse. Within each market, there are different affluence levels, skills, knowledge, and instrument preferences," says Isabella Fonseca, Research Director at Celent and coauthor of the report. "There are also different characteristics within each individual European market. Therefore, in order to understand the European retail investor landscape, we must not only make comparisons across wealth segments, trade behaviors, and skill levels but also identify country-specific characteristics. Additionally, we can assess differences between North American and European self-directed investors."

"This report will provide firms with an understanding of the retail investor landscape in the six European countries and the latest trading and technology preferences," says Alexander Camargo, Analyst and coauthor of the report. "It will also give firms ideas on potential products and services to be offered to retail investors."

This report begins with a description of Celent’s survey methodology, outlining qualifying criteria and presenting an overview of the survey. The report then provides details on the demographics and trading behavior of participants. This is followed by an extensive presentation of retail investors’ online trading platform use, addressing services offered, fee structures, and levels of customer satisfaction. Within each of these sections, Celent highlights country-specific characteristics as well as pan-European characteristics. Celent then presents a detailed analysis of the survey data collected and analyzes the relationships between retail investor behavior and demographics and trading preferences. Celent also provides a detailed comparison to the North American retail investor market. The report concludes with considerations about where the online retail brokerage industry is headed and how firms can unlock pockets of value to grow their book of business.

This 76-page report contains 60 figures and 10 tables.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

3

Survey Overview

5

 

Qualifying Criteria

5

 

Survey Questions

6

Survey Participants

7

 

Demographics

7

 

Experience with Trading

9

Trading Behavior of Retail Investors

12

 

Trading Frequency

12

 

Product Preferences

13

 

Trading Styles and Decision-Making

26

Online Trading Platforms

30

 

User Preferences

30

 

Platforms

32

 

Online Trading Firms’ System Capabilities

36

 

Mobility

39

 

Fee Structure

41

 

Customer Satisfaction

43

Analysis of Results

46

 

Demographics

46

 

Products and Trading Platforms

50

 

Trading Behavior

53

 

Mobility

57

 

Customer Satisfaction

58

Retail Trading in North America vs Europe

61

 

Trading Behavior

61

 

Trading Platforms and Products

66

 

Customer Satisfaction

69

Conclusions

71

Leveraging Celent’s Expertise

73

 

Support for Financial Institutions

73

 

Support for Vendors

73

Related Celent Research

74

Copyright Notice

75

 

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