‘Henrys’ earning £100,000 per year are more likely to want support with investment decisions
A new report has found that more than half of high-income workers would benefit from targeted support to guide their investment decisions.
Henrys, meaning ‘high earners who are not yet rich’, is a term used to describe people who earn £100,000 or more but do not have large amounts of savings or investments.
This is partly due to factors such as high housing and childcare costs, student loans and the 60 per cent tax trap affecting those earning between £100,000 and £125,140. annual. Spending on an aspirational lifestyle can also play a role.
According to wealth manager Quilter, 51 per cent of Henrys say they want ‘targeted support’ on where to invest.
That’s a larger share than the general population, where about 40 percent say they want support to guide investment decisions.
Since April, financial regulator the Financial Conduct Authority has allowed banks and finance companies to offer targeted support to customers in a bid to plug a major advice gap.
Henrys: This group earns high salaries of £100,000 or more a year, but they don’t have a lot of money spent (stock image, posed by models)
This means they are allowed to make general recommendations to customers about what they can do with their money, based on their financial situation and the behavior of others in similar situations.
This could include advice for people to invest to get better returns if they hold ‘too much’ cash.
The FCA hopes this will lead to better financial decision-making among those who cannot afford or do not want to seek formal financial advice.
Quilter Invest CEO Kane Harrison said: ‘Our research shows that many people miss out on investing because they aren’t confident enough to get started. Market uncertainty and complex decisions can be overwhelming, especially if you’re new to the field.
‘There is a large group of people who do not need full financial advice but would benefit from some support to make informed choices.
‘Targeted support is designed to bridge this gap by giving people the reassurance and guidance they need to take their first steps.’
Why are the Henrys less trusting?
Experts suggest the Henrys may be looking for help with financial decisions because they don’t have time to do research themselves.
Savings expert James Blower says: ‘I think Henrys often need more help because they’re often rich in cash but short on time.
‘Their high salaries come from being good at their day-to-day jobs. Most of the time they don’t have time to research and understand [investing]rather than lacking the information needed.
‘But they have the resources to get help, and they probably have the most to gain from doing so.’
Quilter’s survey also cited market volatility as a reason why people want support with their investment decisions.
Blower adds: ‘In periods of market instability it is natural for savers to become less confident.
‘I think one of the best ways to get around this is to trickle feed money into the market in regular sums rather than a lump sum invested at one time. This has the benefit of smoothing out volatile periods in the market.
‘I think it’s important to remember that investments are for the long term and regular long-term savings are more likely to be successful than trying to time the market.’
If you are looking for advice tailored to your circumstances, you can make an appointment with an Independent Financial Advisor to discuss your investment needs.
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