The Italians' real asset is their lack of financial education
Research by Finer for Pictet illustrates the costs of excessive caution: 30% of assets lost by those who shy away from investing
The future does not wait and the Italians' overcautiousness turns out to be a real tax. A real wealth tax, one might add. The theme emerged clearly at the presentation of the fifth edition of the Edufin Observatory "The future does not wait", conducted by Finer, by Nicola Ronchetti for Pictet. And from the research, presented together with Daniele Cammilli, Head of Marketing at Pictet Asset Management, emerged the discrepancy between Italians' conceptual intention to save for the future and their actual paralysis in taking action, with measurable and damaging financial consequences.
The most striking figure is the cost of over-caution, which has led the population's savings, although growing nominally, to decline by 7% in real terms due to the erosive effect of inflation. The example is clear: anyone who had kept their savings 'above the mattress' 20 years ago would have lost 30% of their real value. This shows that the security sought is only apparent and is a real 'prudence tax'**, since savings are bound to erode with inflation. On the contrary, if a hypothetical Italian saver had invested everything 'recklessly' in the global stock market 20 years ago, his real return would have been 250 percentage points higher.
Conceptually, the Italian population projects savings into the future, seeing it as a necessary tool for dealing with future emergencies, uncertainty and volatility. The fundamental objective of investing is the realisation of projects (goal-based investing), a theme that grows significantly year on year and is felt to a greater extent by the younger generations. However, although these goals are very clear, there is a profound inconsistency between the awareness of the need to save and the lack of the next step, i.e. the ability to transform the provision into a concrete investment.
This blockage to action stems from a profound lack of autonomy and a sense of heteronomy: Italians stand aside, trusting that 'someone will take care of it'-an institution, a public pension or an inheritance. This is particularly worrying considering that 53% of the generations that should be more aware that the national welfare system will not be able to guarantee their future well-being still believe that 'someone will take care of it'. This unfounded trust in external support delays concrete action.
Worsening the lag is the predominant impact of negative emotions, such as fear and panic, which play a significant role in financial choices. "The fear of a loss is twice as great as the enjoyment of a gain of the same amount, a striking demonstration of prospect theory," Cammilli recalls. This emotionality translates into a blockage, a bit like saying 'if I don't have someone to guide me, I'll stay put'. The main obstacles are precisely not knowing who to ask (lack of referents) and not knowing when to invest, making the role of the professional as a manager of negative emotionality crucial to overcoming inertia.
