Improving financial literacy of new retail investors for a better support in their investment decision-making process

The Commission aims at assisting the French Financial Markets Authority in designing a financial education strategy for French new retail investors by providing a set of measures for different profiles of new retail investors to invest safely and wisely on the market.

This national strategy, educational tools and a communication campaign around them will enable the French new retail investors to enhance their level of financial literacy and, as a result, make effective and sustainable financial decisions when taking investment decisions.

Context

The Autorité des Marchés Financiers (AMF) has seen a rise in the number of new retail clients in France investing in capital markets over the recent years. New developments such as the increase in digitalisation of tools to invest, the Capital Markets Union, the emergence of new complex financial products, and the increase in household savings in the wake of the Covid-19 pandemic are possible drivers of the emergence of these new retail investors, who tend to be younger, technophile, not aware of all the risks and ‘self-directed’. They are also less likely to use a financial intermediary to access capital markets. These new developments require retail investors to be financially and digitally literate to ensure they understand the potential risks and returns of products and make informed investment decisions, and to avoid frauds and online scams.

Support delivered

Funded by the European Commission through DG REFORM’s TSI, this project is realised with the support of the OECD, which has substantial experience in financial literacy.

During 24 months, the OECD analyses the knowledge, attitudes, and behaviours of new retail investors in France regarding digital and traditional financial services and information sources, including risk of scams, through a quantitative and a qualitative survey, which will help determine several profiles among these new retail investors.

Then, a national strategy with a defined structure, timing, activities to develop and proposed methodology, will be designed in order to promote an appropriate and safe use of financial products and services by new retail investors.

Financial education content will be created for them, including around eight specific communication tools among videos, infographics, fact-sheets, guides, simulators, decision trees and podcasts, to be released on the web and social media, as well as an outline of a communication campaign targeted at new retail investors to disseminate both the national strategy and the educational tools.

Expected results

The project’s results include an enhanced level of financial literacy for the French citizens who are investing in the financial markets for the first time. 

This should result in knowledgeable investors capable of making informed decisions, which is necessary to ensure their financial wellbeing while favouring the economic recovery through sufficient financing equity at country level.

In the longer term, this support is expected to contribute to financial stability and prosperity at both individual and national level.

More about the project

You can read the documents related to the project here: