Too much choice is overwhelming investors who want simple money management and less risk, according to a new survey.
Facing competing claims from more than 2,000 investment funds is information overload – especially for new investors trying to make sense of the market.
A third of savers with £100 a month spare cash have shunned regular investing because they have too many funds to choose from and do not know which are best, says a study by building society Scottish Friendly.
And this confusion has put off around 4.4 million people from regular saving that would have improved their finances.
Another 30% say they would rather have a choice limited to no more than 50 funds, even though the current market gives them many more options.
Savers want low-risk guarantee
Two thirds would prefer a guarantee that they will at least get the money they invest back rather than risk their money trying to maximise returns.
The society explained the survey shows how huge numbers of savers are put off by the complexity of the investment industry and how risk adverse many investors are.
Rather than deal with piles of information, most like simple investments like ISAs and do not want to risk their money on the chance of making a big profit.
Kevin Brown, savings specialist at Scottish Friendly, said: “Many potential investors are telling us that too much choice can be off putting and confusing.
Have you got investorphobia?
“There are thousands of funds on offer to UK investors, so it’s no surprise so many people feel confused. At the end of the day, how someone who wants to start saving wade through all these choices and put together their own portfolio?
“We don’t want to put potential investors off. That’s why our focus is on making investing straightforward and accessible to everyone. In the current climate, people are looking for alternatives for their cash and simply investing in an ISA could be one way to help towards securing a prosperous future for an investor and their family.”
The result is a fear of investing, says the society, which leads to people choosing cash savings because they feel more secure and in control.