General Insurance Article - 1 in 5 Investors set to vote for Brexit

 The Share Centre has surveyed its customers (entirely UK-based personal investors) three times over recent months on the issues around the EU referendum. The latest survey* reflects the views of over 1,800 personal investors.

  

 Commenting on the findings, Richard Stone, Chief Executive of The Share Centre said, “Personal investors, like the population at large, are divided on the EU referendum issues. However, our survey suggests that a clear majority favour Brexit, and are prepared to overlook their concerns regarding the impact this might have on the UK stockmarket. The data also shows that the establishment has a credibility issue with personal investors and that heavyweight voices supporting the Remain campaign have had little impact – in some cases their interventions actually seem to make personal investors more likely to vote to Leave.

  

 “What is clear, with a month to go, is that the vote will have an impact on the UK stockmarket and volatility may increase in the short term. With this in mind, investors may want to reflect on their use of stop loss limits and other such protections. While not guaranteeing to restrict losses in a very fast moving market (prices can jump beyond limits set) these tools can help limit exposure or identify buying opportunities if set to trigger purchases.

  

 “Throughout the lead up to the EU referendum The Share Centre has sought to reflect the views of personal investors into the market so that decision makers and others can see what personal investors think and are concerned about. We will continue to do that and stand ready to support personal investors and provide them with the tools they need to manage their investments through this period.”

  

 Majority of investors are backing Brexit

 When asked how they will vote on 23 June, 56% of personal investors responding to the survey indicated they will vote for Brexit, compared to 39% voting for Remain and only 5% undecided. With a month to go, this indicates opinion is now crystallising.

  

 Although the gap has narrowed since The Share Centre’s last survey in February (which showed 62% in favour of Brexit, 31% intending to vote Remain and 7% undecided), it appears investors remain firmly in favour of the UK leaving the EU.

  

 This is in spite of a strong sense that a vote for the UK to leave will have a negative impact on the stockmarket. 59% are now indicating they are concerned about the impact a vote to leave will have, and two thirds (66%) believe such a vote would have a slightly or largely negative effect on the market.

  

 This apparent willingness to overlook the potential negative impact on the market, may be explained by the fact that 53% of investors believe a vote to leave will have a slightly or largely positive impact on the UK as a whole. This suggests investors are prepared to look beyond their own self-interest and base their decision on the wider impact the referendum might have on the UK.

  

 In light of this, one in five (20%) – more than double the number when last surveyed in February – indicated that they are already changing their investment behaviour ahead of the referendum, deferring investment decisions. A further 18% indicated they plan to do so as the referendum approaches. The change in this data over the last nine months is particularly stark, with 5% indicating they were changing their behaviour last August, 10% in February and now 20%.

  

 Investors are not impressed with the campaign – and do not trust the establishment

 In terms of the campaign itself, investors are not impressed. 85% of respondents to the survey felt the campaign had not addressed their concerns, been honest or of a high quality. 60% of respondents indicated the campaign so far has had no impact on their decision as to which way to vote.

  

 The establishment has a clear credibility issue in the eyes of personal investors. When asked who they trust most when talking about the issues in the EU referendum, out of David Cameron, Jeremy Corbyn, Boris Johnson or Michael Gove, 38% of respondents said ‘none of the above’. The highest scoring spokesperson was Michael Gove at 21%, almost double the next highest, being David Cameron at 13% (Boris Johnson scored 11% and Jeremy Corbyn scored 3%). This data perhaps explains in part why David Cameron is reluctant to debate head to head with Michael Gove or Boris Johnson.

  

 When asked whether President Obama’s intervention had impacted their decision on which way to vote, most personal investors (51%) said it made no difference. Of those whom it did influence, nearly three times as many (30%) said it made them more likely to vote to Leave as compared to more likely to vote to Remain (12%).

  

 Similarly, the intervention of the OECD, IMF and other business leaders have had limited impact with 38% of investors indicating it would affect their decision either way, with that percentage split evenly (19% each) between the two sides of the debate.

  

 The one glimmer of hope for the Remain campaign can be seen when investors are asked the key issues which will determine their vote. Economics has now become the predominant issue, with 34% ranking this as the main factor likely to influence their vote, up from 24% in February. When asked if the recent global economic volatility would affect their decision, 16% said it makes them more likely to vote to Remain, compared to 14% who said it makes them more likely to vote to Leave (66% say it makes no difference and 4% are undecided).