1. Financial Risks International Forum 2019
“How will Persistent Low Expected Returns Shape Household Economic Behavior”
A ReGULATOR AND savers’ perspective
Financial Risks International Forum 2019
“Low Interest Rate Environment: Search for Yield, Risk Management and Transitions”
Paris, 18 & 19 March 2019

2. WHY SAVE ? 1
ILB RISK FORUM MARCH 19th 2019

3. WHY SAVE ? WHY INVEST ? Low interest rates
10 years french government bonds : 0,42 %
30 years french government bonds : 1,47 %
Financial assets : low perceived performance
Investing in financial markets : high perceived risk
ILB RISK FORUM MARCH 19th 2019

4. WHY SAVE ? WHY INVEST ? REFERENCE POINTS
AMF Economists’ findings
between
- for a one off-investment at the start of the period
over a 10 year horizon,
the average real annualised return
(net of inflation, charges and taxes)
3,3% on bonds
2,7% on equities
1,3% on Livret A
Low perceived performance of financial assets
ILB RISK FORUM MARCH 19th 2019

5. WHY SAVE ? WHY INVEST ? REFERENCE POINTS
AMF Economits’ findings
Risk and performance
Despite of
- Historically favourable circumstances for bonds
- Spells of volatility for equities
Equities have delivered broadly comparable returns to those of bonds
For a mixed portfolio invested in both equities and bonds, there is a benefit of an annual regular rebalancing
With a long term horizon
High perceived risk in investing in financial markets
ILB RISK FORUM MARCH 19th 2019

6. 2 WHAT ARE SAVERS ’ NEEDS ? The AMF Saving AND INVESTMENT BAROMETER
ILB RISK FORUM MARCH 19th 2019

7. WHAT SAVERS’ NEEDS, Where ARE THEIR CONCERNS ?
UNFORESEEN EXPENSES
PREPARING for RETIREMENT
ANTICIPATING NEEDS for AGING
69 % in 2017
Stable / 2017
Stable/2017
83%
72%
76%
A NEST EGG FOR NOW AND FOR THE FUTURE
ILB RISK FORUM MARCH 19th 2019

8. INVESTMENT : SELECTION CRITERIA
RISK
EXPECTED RETURN
ILB RISK FORUM MARCH 19th 2019

9. EXPECTED RETURN/ NET PERFORMANCE ?
Inflation
Tax
Social charges
and Taxes
Costs & charges
1,6%
ILB RISK FORUM MARCH 19th 2019

10. CONCERNS FOR THE FUTURE AND INVESTMENT HORIZON
HOW TO INVEST FOR A LONG TERM HORIZON WHEN
IS THE AVERAGE MAXIMAL DURATION OF INVESTMENTS ?
4,9 YEARS
ILB RISK FORUM MARCH 19th 2019

11. … HOW TO INVEST ? A low level of risk
A relative high expected performance
Not long term investment oriented …
ILB RISK FORUM MARCH 19th 2019

12. 3 PSYCHOLOGICAL AND BEHAVIORAL BRAKES AND LEVERS
ILB RISK FORUM MARCH 19th 2019

13. BRAKES : MISCONCEPTIONS ABOUT EQUITIES
Equities are not spontaneously seen as suitable for long-term savings.
Savings in shares are seen as risky or even unprofitable
Shares are not seen as easily accessible and affordable assets.
A qualitative survey AMF - KANTAR-TNS
ILB RISK FORUM MARCH 19th 2019

14. LEVERS FOR LONG TERM INVESTMENTS (1)
THE AMF SAVING AND INVESTMENT BAROMETER RESULTS
16%
Younger (35 ans +)
Financial assets : KE
24%
Male
CSP +
50-150
Self confidence
AND Trust in the future
ILB RISK FORUM MARCH 19th 2019

15. LEVERS FOR LONG TERM INVESTMENT (2)
Younger people are more comfortable with risk
TO UNABLE TO INVEST IN EQUITIES FOR THE FIRST TIME
Younger people mention « ethics »
more often
SUSTAINABLE FINANCE
TO FINANCE
THE ENERGY TRANSITION
and Financial Education
March
25-29th
2019
Oct
2019
ILB RISK FORUM MARCH 19th 2019

16. INVESTMENT SCAMS VIGILANCE5
ILB RISK FORUM MARCH 19th 2019

17. SCAMS ON INTERNET
ILB RISK FORUM MARCH 19th 2019

18. What is a saver’s perception of risk ? A STORY OF Paradox
2018
2019
ILB RISK FORUM MARCH 19th 2019