The risk appetite of islanders has remained steady over the last 12 months even though their belief in the economy has decreased, according to a consumer confidence survey by a leading specialist bank.
Investec Specialist Bank (Channel Islands) Limited, which has offices in Guernsey and Jersey, conducted analysis to gain a better understanding of how islanders were fairing in the current challenging economic environment and if their investment options have changed over the last year.
Over a third of those surveyed in both islands felt their confidence in the economy had decreased, with 42.6% of those asked in Jersey responding pessimistically, compared to 39.1% in Guernsey. Only a small proportion of those who responded to the survey said they did feel more confident about the state of the economy. Guernsey was twice as positive as Jersey with 13.3% feeling more buoyant, compared to only 6.4% in Jersey.
‘The results of the survey highlight not only the shifts in attitude over the last 12 months, but also the differences between respondents in Guernsey and Jersey. The results reflect what we had suspected, that confidence in the economy has decreased, but perhaps most interesting is the fact that those who were willing to take financial risks 12 months ago are still taking them now,’ said Stephen Henry, Head of Investec Specialist Bank (Channel Islands) Limited.
Even though respondents’ confidence in the economy had generally decreased, the majority of islanders felt that there was no change in how willing they were to take a risk with their finances (Jersey with 36% and Guernsey with 42.1% of those surveyed). Jersey is more risk averse than Guernsey, with 32% of Jersey respondents being unwilling to take a risk, compared to just 19.1% in Guernsey.
‘The survey also demonstrates the emphasis consumers now place on quality customer care and the chance to build long-term relationships with locally based relationship managers above other areas of banking such as instant access to accounts and higher interest rates,’ said Mr Henry.
When asked what they specifically looked for in a bank, 36.9% in Guernsey wanted a locally based relationship management team, as did 30.4% in Jersey. Second to a bank’s location in importance was instant access to accounts followed by active management of savings. Respondents then looked for long-term products with less flexibility but higher interest rates. Islanders were least interested in multi-currency services and short-term products.
There was disparity between the two islands when those surveyed were questioned about the maximum amount of time they would be willing to invest their savings. In Jersey, 62% felt happy to ensure their funds were locked up for three years or more. Whereas in Guernsey, 60% felt one or two years was a more appropriate timescale.
NOTE: The consumer consumer confidence survey was conducted in Jersey and Guernsey to 191 participants
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