New research from eToro, conducted in partnership with
Nasdaq, has revealed notable differences between US and UK retail investors
regarding their motivations, openness, and investment habits. The study, which
surveyed 2,000 retail investors across both countries, highlighted distinct
trends in their behaviours and goals.

Retail Investing Culture Differences

The study by eToro and Nasdaq highlights differences between
US and UK retail investors, particularly in their approach to discussing and
sharing investment knowledge. While both markets have seen growth in retail
investing, there are notable differences in openness and engagement.

eToro UK MD Dan Moczulski commented: “The retail investing
culture has evolved massively in the UK in recent years and investing is now a
topic you’re far more likely to hear in restaurants, pubs and offices than you
were a decade ago. However, as the data implies, the UK still trails the US
when it comes to people opening up about the topic of investing and sharing
knowledge within their social circles.

The study found that US investors are more proactive in
improving their investment skills and discussing their portfolios compared to
UK investors.

“Our research shows that amongst those who already invest,
Americans put more time and resources into growing their skills and knowledge
and they’re also more comfortable talking about the topic. I believe that this
gap will close in the coming years, particularly with the right education tools
and investment platforms for the local audience in the UK,” Moczulski added.

Investment Goals

The survey found that US investors are more focused on
achieving financial independence and supplementing their income. 39% of US
respondents cited financial independence as a key goal, compared to 31% in the
UK.

Additionally, 37% of US investors aim to supplement their income, while
only 31% of UK investors share this goal. Conversely, UK investors are more
likely to prioritize funding retirement, with 42% stating this as a key goal,
compared to 32% in the US.

Openness About Investments

The study also revealed differences in how open investors
are about discussing their portfolios. US investors tend to be more comfortable
talking about their investments, with 41% discussing them with friends,
compared to 35% of UK investors.

US investors are also more likely to talk to
family members, with 37% doing so compared to 28% in the UK. They are also more
likely to talk to colleagues, with 21% doing so compared to 18% in the UK. UK
investors are less likely to discuss their financial strategies with strangers,
with only 2% doing so compared to 5% of US investors.

Investment Education and Research

US investors are more
proactive in enhancing their financial knowledge. The study found that 23% of
US retail investors have taken an investment course, compared to just 15% in
the UK. Additionally, 36% of US investors study the strategies of well-known
investors, compared to 28% of UK investors.

US investors also dedicate more
time to research, spending an average of 2 hours and 42 minutes per week on
investment-related research, whereas UK investors spend 2 hours and 24 minutes.

Sources of Financial News

US and UK investors
also differ in the sources they trust for financial news. UK investors tend to
trust financial institutions 53% and specialist media 44% more than US
investors 48% and 36%, respectively.

However, US investors are more likely to
trust friends, family, and colleagues 25% compared to 19% of UK investors. US
investors are also more likely to use AI tools to research and track stocks,
with 17% employing these tools compared to 13% of UK investors.

The survey, conducted by Opinium from 16 August to 2
September 2024, included 1,000 respondents from the UK and 1,000 from the US.
It focused on retail investors, defined as individuals holding at least one
investment product like shares, bonds, or funds, whether self-directed or
advised.