Investor Personality Study 2020

The company which did the report - Standard Chartered

About the company - Standard Chartered plc is a British multinational banking and financial services company headquartered in London, England. It is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority.

Area of research - Understanding personality traits enables better investment decisions.

Name of the organization which did the survey - Oxford Risk

Participants of the survey - 1,200 investors in Hong Kong, Singapore, and Taiwan.

The main points of discussion in the survey:

1) Personalities differ by market

2) Putting behavioural insights to work

3) Financial personalities: the nine defining traits - 

1. Risk tolerance
2. Speculation
3. Composure 
4. Confidence
5. Financial comfort
6. Desire for guidance
7. Impulsivity
8. Desire for legacy
9. Internal locus of control

4) Investor behaviour in markets

1. Where are the Enthusiastic Investors?
2. Where are the Comfortable Investors residing

5) What do personality traits tell us?

6) The value of hyper-personalization

7) Can technology hyper-personalize advisory at scale?

Findings of the survey: 

1.  Standard Chartered’s recent research into the wealth aspirations of people in Asia, Africa, and the Middle East revealed that 56 per cent are set to fall short of their goals by half or more, based on their current savings and investments.

2. Personalities differ by market :

   1. Hong Kong has the highest proportion of Enthusiastic investors (40 per cent of the total investor base). They are higher in Impulsivity and more likely to attribute success to luck. Impulsivity, Speculation, Desire for guidance.

   2. Singaporean investors, in contrast, tend to fall into the Comfortable category (47% of the total investor base). They show a relatively stronger desire to leave a positive legacy. A desire for legacy, confidence, financial comfort.

   3. Taiwan is at the other end of the spectrum with most investors mapping to the Conservative archetype. They have less interest in Speculation and lower risk tolerance. Internal locus of control, Composure, Desire for guidance.

3.  The comfortable investor:

   1. Scores high on Composure.

   2. Confidence and Financial comfort, and Internal Locus of control.

   3. Tends to be a more experienced investor. 

   4. Likely to stay relatively calm and make reasonable decisions in turbulent times. 

   5. Scores low on Speculation and Impulsivity.

4. The conservative investor:

   1. Scores relatively high on Financial comfort and Internal locus of control.

   2. Do not take too many chances and would like to have clear investing and decision-making principles. 

   3. Less likely to invest in volatile portfolios or look for guidance during times of extreme turmoil.

   4. Less likely to make speculative moves but would benefit from establishing a contingency plan.

5. The enthusiastic investor:

   1. Scores high on Speculation and Impulsivity.

   2. Tends to be less experienced and would benefit from a pre-agreed strategy.

   3. More likely to speculate in times of market turmoil.

   4. Would benefit from setting aside a portion of their wealth to satisfy trading impulses without jeopardizing their entire wealth.

6. The research data tells us that investors can reliably be measured on multiple dimensions, each giving clues about their relative comfort or discomfort with a certain portfolio and/or financial decisions they will need to make on their investment journey. Advisors can use these 9 behavioural insights to develop ways of communicating that are more suited to each archetype.

7. With accurate knowledge about individual financial personalities, investors and wealth advisors can know ahead of time where emotional traps lie and take steps to stick to their long-term plans. This can be accomplished by personalizing the following:

   1. Investments: Personalising the choice of investment products to increase an investor’s comfort with a portfolio.

   2. Information: If advisors adapt to communication styles and messages that account for individual personality traits, they can help investors avoid emotional reactions to their portfolio information.

   3. Decisions: Depending on their personality type, investors need different levels of assistance with their investment decisions.

Technology is the key to putting personality insights to work at scale. It is possible to build decision-enhancing tools to guide clients to better decisions by using emerging technologies such as artificial intelligence (AI). Armed with this information, the system churns out scores for each client and provides a personalized list of the best actions to their advisor. This helps advisors determine which clients to reach out to first, in order of risk and urgency. 

Questions :

1. The report was done by?

1. Standard chartered

2. Global markets

3. Societe generale

4. Synchrony

2. What is the title of the study report?

1. Achieving financial goals

2. Investor personality

3. Social mobility

4. Economic growth

3. What kind of service is provided by Standard chartered plc?

1. Auditing

2. Human resource

3. Banking and financial services

4. Investment policies

4. Who did the survey?

1. Standard chartered

2. Global markets

3. Societe generale

4. Oxford risk

5. When was the report done?

1. 2020

2. 2019

3. 2018

4. 2017

6. How many participants were included?

1. 1200

2. 1500

3. 2000

4. 2500

7. How many defining traits are there?

1. 5

2. 6

3. 7

4. 9

8. Who has the highest proportion of Enthusiastic investors?

1. Singapore

2. Taiwan

3. Hong Kong

4. Africa

9. Who has the highest proportion of comfortable investors?

1. Singapore

2. Taiwan

3. Hong Kong

4. Africa

10. Who has the highest proportion of conservative investors?

1. Singapore

2. Taiwan

3. Hong Kong

4. Africa

11. What do personality traits tell us?

1. Investors can reliably be measured on multiple dimensions

2. Making investors more comfortable

3. Investors with high scores

4. Changes to investment portfolios

12. Which market is higher in Impulsivity?

1. Singapore

2. Taiwan

3. Hong Kong

4. Africa

13. Which market has a strong desire to leave a positive legacy?

1. Singapore

2. Taiwan

3. Hong Kong

4. Africa

14. Which market has less interest in Speculation?

1. Singapore

2. Taiwan

3. Hong Kong

4. Africa

15. ______was the most widely considered in the past by the wealth industry.

1. Confidence

2. Financial comfort

3. Desire for guidance

4. Risk tolerance

16. Hyper-personalisation can be achieved by following?

1. Interest, information, investment

2. Confidence, investment, decision

3. Investment, information, decision

4. Experience, interest, investment

17.  Investors with high scores on _______ will find frequent hand-holding appealing.

1. Financial comfort

2. Desire for guidance

3. Impulsivity

4. Desire for legacy

18. An investor with _____ composure would benefit from less frequent and less detailed reporting of their portfolio performance.

1. High

2. Low

3. Maintained

4. Fluctuating

19. Which investor scores low on Speculation and Impulsivity?

1. The comfortable investor

2. The enthusiastic investor

3. The conservative investor

4. None of the above

20. Which investor scores high on Speculation and Impulsivity?

1. The comfortable investor

2. The enthusiastic investor

3. The conservative investor

4. None of the above