DDV: Investors trust independent financial platforms as primary source of information

More than 65% of investors in Germany are turning to independent online financial platform as primary source before purchasing a financial product, according to the latest monthly investors’ trends survey released by the German derivatives association (DDV).

“Above all, these platforms should suggest to investors that these web offers, as the name suggests, are initially independent,” said Lars Brandau (pictured), managing director at the DDV. “For example, if you find the latest car from a particular brand exciting, then you are not just reading the manufacturer's driving report. It is similar here.”

However, German consumers tend to have a certain laziness and brand loyalty, so it can be assumed that investors who have read in on independent portals will continue to read from their trusted issuers and look for the corresponding products there, said Brandau, adding that, “without any claim to completeness or a recommendation character in Germany, Brandau explains further, Finanz.net, Wallstreet Online, Börse.de or Boerse-go.de as well as Onvista are among the extremely high-reach websites that investors like to use”.

The fact that, in an online survey, the participants predominantly chose the internet as the medium of their information is not surprising

The second most used source to support investors’ financial decision-making is the print media including newspaper, magazines and journals with 12% of respondents going this route before investing.

“The fact that, in an online survey, the participants predominantly chose the internet as the medium of their information is not surprising,” said Brandau. “Nevertheless, both print media and one-on-one consultations remain essential. Investment is a complex topic. As such, investors should always obtain comprehensive information and draw on the variety of sources for this purpose.”

In the digital age “many investors first get real-time information provided by well-founded reporting in newspapers and magazines should in no way be underestimated," according to Brandau.

About one-fifth of investors are choosing other sources for information such as investment adviser/over-the-counter (6.8%), issuers’ website (6.5%) and newsletters (6.3%) to inform themselves before buying a structured product.

However, Brandau stresses that even though “it is obvious that the internet is the first port of call, it is extremely important to mention, all other options for obtaining your own information are still used”.

The internet is usually only the first point of contact, and there are still questions that are essential for which a personal conversation is essential,” said Brandau. “Interactive options for clarifying specific questions with issuers or reading background reports from the print sector are still used.”

Compared to the survey’s results last year, independent financial portals have become more popular (2019:59.5%) to the detriment of the rest of information sources, such as print media (2019: 15.9%), issuer platforms (2019:8.5%), face-to-face advisory (2019:7.1%) and newsletters (2019:9%).

As part of its digital standardisation and transparency initiatives, the DDV remains vigilant that the information offered to investors is provided in “a meaningful and neutral manner and, above all, as comprehensible as possible for investors”.

“We are currently working on a new online training tool that works responsively on all end devices and combines text modules with tasks and learning videos,” Brandau said. “In the end, the participants can check their knowledge in a test and clarify open questions.”

The monthly online poll on market trends conducted by the DDV, surveyed over 2,089 investors in cooperation with several financial online portals in February.