Going for gold? Investors go with their gut

The vast majority of precious metals investors (68%) trust and rely on their own thinking and judgement for their investment decisions.

That’s the response of private investors using world-leading precious metals marketplace BullionVault.

The survey, which sourced the views of over 1,000 precious metal investors from BullionVault’s global client base, also found that a significant proportion of investors (16%) act on ideas sourced online from bloggers, finfluencers, tipsters, podcasters, among others.

Meanwhile, only 6% of respondents said they act on the advice of a financial adviser, financial planner, or advisory stockbroker.

This finding is starker even than recent figures from the Financial Conduct Authority (FCA) which found that just 9% of UK adults received financial advice about their pensions or investments in the previous 12 months.

Adrian Ash, Director of Research at BullionVault, said,”While much of the conversation around accessing financial advice and guidance has focused on pensions, stocks, and bond investments, the low uptake of financial advice is lower still among people who include precious metals in their investments after seeking direction from alternative sources.

“It’s perhaps unsurprising that investors who own gold or silver are avowedly self-directed. Physical bullion doesn’t rely on anyone else’s financial performance for its value, and that offers an obvious hedge to securitized assets and packaged products.

“In my experience only a handful of financial advisors will ever recommend physical bullion to their clients. That’s despite gold outperforming all other asset classes during my 25 years in precious metals.

“Gold investors are far from solely invested in bullion, however. On average, our regular surveys find that they hold over 80% of their investable wealth in other assets, using precious metals as a form of portfolio insurance as well as a source of growth. So the advisory gap applies equally to those other assets, and it suggests a real failure to engage or instil confidence in professional advice by the formal financial industry.

“Countless sources on the internet make it easier than ever to find investing ideas and information. But as the financial crisis showed, due diligence is vital, and it starts with taking responsibility for your own money.

“The low take-up rate of financial advice is perhaps one reason why execution-only services such as BullionVault are becoming increasingly popular. While these specialised platforms are equally open to advised as well as self-directed investors, they enable the customer to act on their personal decisions directly with full sight of their costs, rather than mediated through packaged products.”

Despite the leaps and bounds achieved by AI, less than one percent of respondents said they most use and trust AI services for their investment decisions, highlighting that there is still some way to go before investors hand over the reins to artificial intelligence services to support them managing their financial assets.

“Although many investors are happy seek ideas from online sources such as finfluencers and tipsters, trust in AI services is vanishingly small. That could signal a big problem with the finance industry’s push towards robo-advice, because where investors are willing to take direction, the human element seems to be key. While Gen Z might prefer to avoid phone calls let alone face-to-face meetings, investors as a group show a clear preference for personality over AI.