Challenges and Opportunities for the Future Investor: A Practitioner’s Guide

Abstract

This chapter presents the results of a questionnaire launched in June 2022 targeted to European financial professionals. The questionnaire includes two sections dealing with specific questions regarding the challenges and opportunities of sustainable finance and financial digitalization, with a deeper focus on robo advisory and Open Finance. The questions have been devised focusing on the themes emerged in the reviews of the regulatory developments and academic research conducted in Chapters 3 and 4 to explore practitioners’ views on these important topics. Given the relevance of stakeholders’ feedback in the finetuning of the regulatory activities within the European Union, the survey offers the opportunity to feel the temperature of the practitioners’ views before several of the new regulatory requirements become mandatory.

Appendix: The Questionnaire

Welcome! This is a survey on the challenges and opportunities in financial advisory in the post-MiFID2 regulatory landscape.

The survey is anonymous. We will only ask you for some demographic information for statistical purposes, which however will not allow us to trace your identity. We ask you to answer all questions spontaneously and sincerely. Answering the questions will take about 10 min.

Thank you for the help you are giving to research!

• Q1 The European commission has introduced a series of regulatory changes aimed at stimulating the diffusion of sustainable investments. think about your current clients and their portfolios and how you are or will be facing the challenge of sustainable finance.

For each of the statements below, indicate to what extent you agree or disagree (1 = strongly disagree; 7 = completely agree).

	1	2	3	4	5	6	7
I can find a sustainable substitute for most of the products I place ()
The risk tolerance of some clients makes them unsuitable for sustainable investments ()
The time horizon of some clients makes them unsuitable for sustainable investments ()
The loss tolerance of some clients makes them unsuitable for sustainable investments ()

• Q2 In your opinion, what percentage of sustainable investments out of the total managed portfolio defines a “sustainable portfolio”? indicate the percentage (e.g., x%) in the box below.

______________________________________________________________

• Q3 In your opinion and experience which of the following characteristics identify the ideal client profile to offer sustainable investments (portfolio with [the percentage entered at the previous question of sustainable financial products).

For each of the statements below, indicate to what extent you agree or disagree (1 = strongly disagree; 7 = completely agree).

	1	2	3	4	5	6	7
Is male
Is under 41 years old
Financially supports one or more people (spouse, children, parents, etc.)
Is retired
Often talks about sustainable investments both in the environment and in society
Recently received an inheritance
Has an above-average level of financial literacy
Has a high income level
Has an academic degree
Feels competent in financial investments

• Q4 In your experience, given the same financial product, sustainable investments (as opposed to the unsustainable ones) are

• ○ less volatile

• ○ equally volatile

• ○ more volatile

• Q5 In the European Action Plan for sustainability, the European Commission has proposed to carry out numerous actions to produce sustainability standards, certifications, and labels to be applied to sustainable financial products. The aim of these actions is to fight greenwashing, i.e., the practice by which some companies present themselves or their financial products as sustainable when they in fact are not.

In your experience, what is the investors’ stance as regards the greenwashing problem?

• ○ it is an issue they are not familiar with

• ○ it is an issue they are familiar with and thus they are particularly careful about sustainable investments documentation

• ○ it is an issue they know exists but do not worry about because they trust that the products I propose are not affected by it

Section 2—Robo advisory and open finance

• Q6 For some years now, the European Commission has been considering the digitization of financial services, which concerns not only information on services and products but also all new digital services such as fully or partially automated advisory (robo advisory).

In your opinion and experience, which of the following characteristics identify the profile of the client interested in a robo-advisory service in a context where the service may not replace traditional advisory, but rather be offered alongside it.

For each of the statements below, indicate to what extent you agree or disagree (1 = strongly disagree; 7 = completely agree).

	1	2	3	4	5	6	7
Is male
Is under 41 years old
Financially supports one or more people (spouse, children, parents, etc.)
Is retired
Accesses their bank account only via online app
Recently received an inheritance
Has a low risk tolerance
Has an above-average level of financial literacy
Feels competent in financial investments
Has little financial experience
Has high self-confidence
Has financial resources of less than 500,000 euros

• Q7 What Makes a Traditional (In-Person) Advisory Service Different from that of a Robo Advisor?

For each of the statements below, indicate to what extent you agree or disagree (1 = strongly disagree; 7 = completely agree).

	1	2	3	4	5	6	7
It is cheaper ()
It is more easily accessible ()
It is easier to understand ()
It is more reliable ()
It is more customized to the client ()
It is more independent ()
It is more reassuring ()

Q8 Compared to financial advisors authorized to operate in the european union, robo advisors are subject to…

• ○ fewer regulations

• ○ the same regulations

• ○ more regulations

• Q9 Imagine an Open-Finance System Akin to that Set Forth by the PSD2 Directive on Open Banking Will Be Developed. Open Finance is a Voluntary Data Sharing Model in Which Financial Information is Shared.

The following list includes financial information that you may want to have access to for dealing with your client's needs better. Sort such information from the most to the least useful

• ______ outstanding consumer loans.

• ______ outstanding existing real estate loans.

• ______ insurance policies.

• ______ other medium/long-term loans.

• ______ securities investments.

• ______ savings.

• ______ other forms of asset management.

• ______ other forms of unmanaged savings.

• Q10 Is there any type of information you would like to have access to in an open-finance system which is not included in the list above? if there is, please enter it below.

Section 3—Socio-demographic section

Before concluding, we would like you to answer some questions for statistical purposes.

• Q11 Indicate your gender.

• ○ Male (1)

• ○ Female (2)

• Q12 Indicate your age in numbers (e.g., 25).

• Q13 Indicate your professional age * in numbers (e.g., 15).

*Number of years you have been employed in the banking or financial sector

• Q14 Indicate the professional role you currently hold.

• ○ Bank employee

• ○ Independent financial advisor

• ○ Financial advisor

• ○ Analyst

• ○ Asset or wealth manager

• ○ Academic (lecturer, researcher, or professor)

• ○ Other (specify) ___________________________________________

• Q15 Please select the country in which you currently work.

• ○ Italy

• ○ France

• ○ United Kindgom

• ○ Another European country (please state which one)

• ○ An extra-European country (please state which one)

• Q16 Indicate the highest degree you hold

• ○ Primary school diploma

• ○ Middle School diploma

• ○ High school diploma

• ○ College/University Degree

• ○ Masters or other professional graduate school

• ○ Ph.D.