The Report presents evidence on financial knowledge, attitudes and investment choices of Italian financial decision-makers, also to gain insights on any feature that may be relevant to investor protection.
The 2021 Report is structured in eight sections; the first two are based on external source and supervisory data and the other six sections on the Survey ‘The approach to finance and investment of Italian households' administered by GfK Italia to a representative sample of Italian retail financial decision-makers.
Macroeconomic environment
In October 2021, economic activity in the main advanced countries was expected to recover strongly compared with the previous year. ... more
The positive outlook, which was also linked the Covid-19 vaccination campaigns, remained however conditioned to developments in contagion, which was progressively increasing especially in Central and Northern European countries.
Household wealth and savings
In 2021 the saving rate remains above its pre-crisis levels, both in the euro area and in Italy, after increasing by about seven percentage points in 2020. ... more
Across the Eurozone, households keep displaying a strong preference for liquidity, whose weight on total financial assets increased to 34% (32% in Italy) over the past five years (as of June 2021). Over the same period, the weight of bonds declined while the weight of equities, mutual fund shares and insurance and pension products increased. Overall, from 2015 to the first half of 2021, financial market participation, as proxied by the ratio of financial instruments to liquidity in household portfolios, remained almost unchanged both in the Eurozone and in Italy, where per capita financial investments continue to be lower than the euro area average (€2,330 and €3,160, respectively). In Italy, interest in equity markets and online trading is growing, especially in the wake of the outbreak of the pandemic, as shown by the increase in trading activity carried out by investors, mainly in equity instruments. Also interest in crypto-assets has also risen, within an ever-expanding global market characterised by highly heterogeneous assets and strong price volatility, and in the context of a sharp acceleration of the ongoing digitalisation of financial services. These trends call for particular attention to be devoted to the digital skills of individuals, which are not widespread in Italy yet, especially among women, and remain historically below the European average.
Socio-demographics and personal traits
The 2021 CONSOB Observatory on ‘The approach to finance and investment of Italian households' collects data on 2,695 individuals, representative of the population of Italian financial decision-makers. ... more
Since 2019, the survey includes a longitudinal component (panel) to track the evolution over time of knowledge, attitudes and behaviour of respondents. Consistently with previous surveys, men remain the financial decision-maker in most cases (72%), even though they often share their choices with their partner. Attitudes towards managing personal finances were reviewed with regard to several aspects: financial anxiety, perceived ability to achieve one's own financial goals (financial self-efficacy), financial satisfaction and difficulty in saving for long-term goals. In line with previous results, in 2021 less than 10% feel uneasy about managing money (in the longitudinal component of the sample, the indicator is lower than in 2020, but higher than in 2019). The share of individuals who perceive themselves to be financially self-effective is 38%, down from 45% in 2019 (the same trend is also seen in the panel component). More than half of respondents are satisfied with their current financial situation (this figure is in line with 2020 and increasing for the panel component), in some cases because of optimism (15%). Information on self-efficacy, financial anxiety, financial satisfaction, and difficulty in planning for the long term was aggregated into a synthetic indicator capturing individuals' overall attitude towards managing their finances. The sample average of this indicator is equal to 4.7 on a 0 to 10 scale, ranging from 4.1 for the subsample of non-investors to 5.8 for investors, and records higher values among men, older people, and individuals with a bachelor's degree. Finally, less than 30% of interviewees display a high level of trust in financial intermediaries (the figure has declined with respect to the previous year).
Financial knowledge
Basic financial knowledge is still not widespread among Italian financial decision-makers. ... more
The share of correct answers with reference to five basic concepts (risk-return relationship, compound interest rate, inflation, mortgage, risk diversification) averages around 50%. This figure drops to around 40% if potentially unintentional correct answers are excluded (i.e. answers given by individuals who ex-post were not able to assess the number of correct answers provided). Whilst remaining low, the level of financial knowledge keeps increasing slowly: in 2021, indicators referring to basic knowledge increased by 3 percentage points compared to 2019. Over the same period, within the longitudinal components of the survey, investors display an increase in their level of financial knowledge of 5 percentage points, compared to 4 points for the subsample of non-investors. Notably, knowledge drops significantly on average among individuals participating in financial markets for the first time in 2020 or in 2021. More than half of the respondents, mainly young people and individuals with a high level of basic financial knowledge, are interested in learning more about financial topics that could be potentially useful when making important choices; of these, one third would turn to their intermediary and/or financial advisor, while slightly more than 20% would prefer to find out more on institutional sites (such as those of CONSOB and the Bank of Italy) or through specialised media.
Financial control and savings
The attitude to financial control is not widespread among Italian financial decision-makers. ... more
In most cases they have neither a financial plan nor the habit of always sticking to their budget (only 11% declare both habits). On the other hand, the attitude to save is widespread (reported by 75% of respondents). Taking into account all these behaviours, the overall degree of financial control seems unsatisfactory (as gauged through a synthetic indicator whose value averages 5.5 on a scale from 0 to 10). The health crisis affected households' ability to save. About 27% of survey participants report a reduction in household income (either temporary or permanent); 39% struggle to meet fixed and recurrent expenses (so-called fragile households) while 28% state to be unable to manage an unexpected expense of €1,000; finally 32% report a decrease in their wealth. Regardless of the impact on the amount of wealth, since the outburst of the pandemic savings choices are mainly associated with reduced spending (particularly among those whose level of savings has risen). More than 36% of respondents do not know how to employ their money in the current economic situation; among the others, 19% indicate a preference for cash, 17% for real estate investment and 11% for financial investment.
Investment choices and investment habits
Participation in financial markets keeps growing, with the share of investors at 34% of financial decision-makers in 2021 vs 30% in 2019. ... more
The most widespread assets remain bank and postal savings (43%), followed by Italian government bonds (25%) and mutual funds (24%). Within the longitudinal component of the sample covering the three-year period 2019-2021, three subsamples of investors were identified: those who entered financial markets either in 2020 or 2021 (entrants), investors active over 2019-2021 (panel investors), and respondents who left financial markets either in 2020 or 2021 (exiting investors). Compared to panel investors, entrants are more likely to have lower levels of financial knowledge and digital skills, to report financial fragility, and less likely to engage in financial planning and budgeting. As for investment habits, the proportion of investors who seek for professional support for their investment choices increased in 2021 up to 28% compared to 17% in 2019, although informal advice remains the most common habit (37%). Within the longitudinal component of investors, it is possible to distinguish those who have turned to a financial advisor in 2020-2021 (new advisees) from investors who have permanently relied on a professional over the three-year period (panel advisees). New advisees are on average characterised by a lower level of financial knowledge, and slightly higher digital skills than panel advisees. Attitude towards managing personal finances (money management attitude) are discriminant with respect to decision makers' characteristics and behaviour. In particular, respondents with higher money management attitude exhibit higher financial knowledge and digital skills, declare less frequently situations of financial fragility, show a higher attitude towards financial control. In Italy, participation in financial web communities is still marginal: only 6% of investors declare to be a member of financial web communities, while 25% have heard of them but are not members and 69% do not know them. Interest in joining a community in the future, reported by 16% of investors, is negatively associated with financial knowledge and is most frequent among financially vulnerable respondents.
Sustainable investments
In 2021, the proportion of Italian financial decision-makers who claim to have at least a basic knowledge of sustainable investments (SIs) reached 20% (18% in 2019), up to 37% in the subsample of investors (23% in 2019). ... more
The internet is the source of information on SIs most often mentioned by investors (43% of cases; it was 10% in 2019). Exceptions are informed investors who use financial advice or asset management services, with the professional being the main point of reference in 40% of cases, up from 21% in 2019. Interest in SIs is displayed by 73% of the investors, up from 62% in 2019; the figure rises up to 88% among informed investors (less than 84% in 2019). The preference for sustainable investments is more prevalent among women, younger investors and those with a higher level of financial knowledge and digital skills. In 2021, the share of investors holding a sustainable financial product rose slightly to 9% from 7% in 2019; this increase is most significant in the subsample of advisees (from 8% in 2019 to 19%).
Financial digitalisation
The use of the Internet by Italian households for financial matters ranges between 2% for trading in crypto-currency and 44% for online banking, it reaches around 45% for the purchase of goods and services and 53% for access to social networks. ... more
Respondents rated their ability to use the Internet as at least good in 27% of cases in the non-investor subsample and 42% of cases in the investor group. A more detailed self-evaluation of digital knowledge, as measured through seven basic and advanced concepts, shows that the percentage of correct answers varies from 12% to 61% (44% on average). The proportion of financial decision-makers adopting appropriate behaviour for safe use of the Internet ranges from 48%, as for sharing of their personal data, to 72%, as for the use of antivirus software (with the average sample responses in line with appropriate behaviour being around 61%). About 60% of interviewees are interested in increasing their digital skills, especially if easy-to-use technologies and free training are available. Interest is positively correlated with digital skills. Among respondents using the Internet for one or more financial matters, 28% report using online financial services more than they did before the pandemic; of these, almost all are willing to maintain this new habit in the future, appreciating among other things the greater accessibility and convenience of digital over physical channels. In contrast, interviewees unwilling to use the digital channel once the pandemic is over are mainly those who are not confident about their skills (and generally not interested in raising them), and those who prefer face-to-face interaction. Familiarity with digitalised services is still low: the share of investors who claim to be knowledgeable ranges between 19% for robo advice (7% for non-investors) and 39% for crypto-currencies (18% for non-investors).
The Report was prepared by: Nadia Linciano (coordinator) - CONSOB, Head of the Economic Studies, Research Department (n.linciano@consob.it) Valeria Caivano - CONSOB, Economic Studies, Research Department (v.caivano@consob.it) Daniela Costa - CONSOB, Economic Studies, Research Department (d.costa@consob.it) Monica Gentile - CONSOB, Economic Studies, Research Department (m.gentile@consob.it) Paola Soccorso - CONSOB, Economic Studies, Research Department (p.soccorso@consob.it)
The opinions expressed in the Report are the authors' personal views and are in no way binding on Consob.
