A recent study disclosed that over 50% of individuals with high incomes seek specialized assistance for making investment choices.
The term “Henrys” refers to “High Earners, Not Rich Yet,” describing those earning £100,000 or more annually but with limited savings or investments. This situation often arises from significant expenses such as housing, childcare, student debt, and the 60% tax bracket affecting those earning between £100,000 and £125,140 annually. Additionally, maintaining a lifestyle of aspiration can contribute to their financial status.
Research conducted by the wealth management firm Quilter indicates that 51% of Henrys express a desire for “targeted support” to guide their investment endeavors.
In contrast, only about 40% of the general public expresses a similar desire for investment guidance.
This insight challenges the common perception that younger investors are self-assured and prefer to curate their investment portfolios with individual stocks independently.
This may buck many people’s expectations, as the younger generation of investors are regularly painted as more confident and happy to build their own portfolio of self-selected individual shares.
Investors under-35 are typically seen as having a propensity to pick popular stocks alongside hugely popular ETFs that track the market.
Henrys: This group earn high salaries of £100,000 per year or more, but don’t have a lot of money squirreled away (stock image, posed by models)
An FCA survey found that two-thirds of investors aged 18 to 40 made investment decisions in less than a day, with one-in-seven deciding to purchase in under 60 minutes.
Meanwhile, the Shepherds Friendly UK Investment Report found that investors aged 25 to 34 said they were most likely to invest in stocks and crypto.
Since April, financial regulator the Financial Conduct Authority has allowed banks and financial firms to offer targeted support to customers in a bid to plug a massive advice gap.
It means they are allowed to make generic recommendations to customers about what they could do with their money, based on their financial circumstances and the behaviour of others in similar situations.
This could include suggestions to people to invest for better returns if they are holding ‘too much’ cash.
The FCA hopes this will lead to better financial decision-making among those who can’t afford, or don’t want to get, formal financial advice.
Kane Harrison, CEO of Quilter Invest, said: ‘Our research shows that many people are missing out on investing simply because they don’t feel confident enough to get started. Market uncertainty and complex decisions can make it feel overwhelming, particularly if you’re new to it.
‘There is a large group of people who don’t need full financial advice but would benefit from some support to make informed choices.
‘Targeted support is designed to bridge that gap by giving people the reassurance and direction they need to take their first step.’
Why are Henrys less confident?
Experts suggest that Henrys might be seeking help with financial decisions because they don’t have the time to research it themselves.
James Blower, savings expert says: ‘I think Henrys often need more help because they are often cash rich but time poor.
‘Their higher salaries come from being good at their day jobs. They often don’t have the time to research and understand [investing], rather than lacking the knowledge needed.
‘But they have the resources to get help and they probably have most to gain from doing so.’
The volatility of the market was also noted in Quilter’s survey as a reason people wanted support with decisions about investing.
Blower adds: ‘It’s natural that savers are less confident in volatile periods in the market.
‘I think one of the best ways around this is to drip feed money into the market – regular sums, rather than one lump sum invested at a single point in time. This has the benefit of smoothing out volatile periods in the market.
‘I think it is important to remember that investment is for the long term and that regular saving over a long period is more likely to be successful than trying to time the market.’
If you are looking for advice tailored to your own circumstances, you can make an appointment with an independent financial adviser to discuss your investment needs.
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