New Survey Shows Trust in Best Buys Lists is Low
According to a survey conducted by independent savings and investment advice website BoringMoney.co.uk, 68% of respondents rate their confidence in getting better returns using a fund Best Buy List vs going it alone at 6 or less out of 10.
18 June 2019;
Over 25% of people said their confidence in these lists was 2 out of 10 or lower.
This lack of confidence – measured on a scale where 0 is not very confident and 10 is very confident – was reinforced by responses showing a broader lack of trust in the investment industry. 77% gave a score of 6 or less for the for the question “Do you trust the investment industry? (on a scale where 0 is not at all and 10 is Yes, definitely).
Holly Mackay, CEO of Boring Money said:
Consumer trust – already low – has been rocked by the front-page news about Woodford’s fund suspensions and its inclusion on the Hargreaves Lansdown Best Buy list.
According to the survey, 70% of respondents use Best Buy Lists to help them choose an investment – though just 25% said they rely on them, while 45% said they use them as a secondary sense-check. Even those who use Best Buy lists have limited trust in their effectiveness, with 59% of those respondents giving a confidence score of 6 or less for Best Buy lists.
Over the past week I’ve had emails from people saying they don’t ‘trust these lists blindly’, that they ‘have always been a little suspicious’ and that ‘the rather small reserve of trust that exists for the investment / fund management industry is in danger of evaporating completely’.
On the other hand, new research we have conducted with over 4,000 people asked what they would most like to ask an IFA. Second only to general questions about pensions, is a question about which investments to buy. There are 33,000 investment funds in Europe and it remains a baffling selection. Consumers need help.
The industry has to respond and re-build trust, and this comes back to the usual suspects of needing better transparency, clear explanations and strong visuals and dashboards. Sunlight will be a more effective disinfectant than endless regulation.
 Survey of Boring Money readers with 573 respondents, conducted between June 14 and June 17.
 Nationally representative YouGov survey of 4,179 UK adults, conducted for “50 Shades of Advice”, a new industry report to be published 20 June 2019.
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Fifty Shades of Advice research report
As the FCA kicks off a review into the RDR and FAMR, we asked consumers what are their needs? The Advice Gap remains a huge problem. New technology can deliver solutions but we are arguably focusing on the wrong question – ‘what shiny things can we build’ rather than ‘what is it that people actually want’?
We have conducted research including a nationally representative survey of UK adults, consumer interviews, adviser interviews, provider interviews and ‘Deep dive’ interviews with our Boring Money readers.
Notes to Editors:
Other representative comments from Boring Money readers:
When I first set out on the road as a "self investor" three years ago I found it somewhat daunting to be faced with 3000+ funds to choose from. Initially I did use a number of the "best buy" lists in addition to the various awards that are handed out by publications like Money Observer to help filter this rather bewildering universe.
I do still use top lists such as those from AJ Bell or Money Observer and even from Hargreaves, as they are useful for ideas and starting points. But I don’t trust them blindly and check any fund selection against a number of sources and against performance charts/tables.
…I have always been a little suspicious that their promotional material / recommendations is very much geared to self interests and has to be taken with a pinch of salt.
I have found that in the case of Fidelity they almost go over the top in stating that investments can go up as well as down, they insist when adding or removing funds from their Select 50 list that it does not indicate a fund is no longer suitable for an individual and they make it very clear that unless one is satisfied that a fund is suitable one should seek independent advice.
I have about £2k sitting in the Neil Woodford account, plus a percentage within the HL multi manager fund. I don’t feel overly exposed and half feel that I may leave the money in the fund to see what happens. Brexit is the ultimate problem – I don’t suppose he expected (as did none of us) that the uncertainty would drag on for so long. To invest in funds you have to diversify and accept you aren’t going to win all the time.
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Cara Whitehouse, Boring Money
About Boring Money:
Boring Money is an independent research and content business which provides information, tips and Best Buys to consumers. The business conducts regular research with industry providers and consumers and looks at the developing DIY investment market from both the customer and provider perspective. Boring Money holds test accounts with over 25 providers and also holds regular focus groups and interviews with consumers to ensure regular input and feedback from the user perspective.
Founder Holly Mackay has worked in the investment industry for 19 years and is supported by a team of 10 researchers, analysts and marketing execs. Boring Money are not regulated to give personal financial advice, nor are they regulated by the industry watchdog.