Retail investors in the UK are concerned that the banking sector’s recent collapses will damage the wider economy, according to new research from investment platform, Shojin.

The firm commissioned an independent survey among 914 UK adults, all of whom have investment portfolios worth in excess of £10,000. This included all forms of investments but discounted their savings, pensions and property used as a primary residency.

Shojin found that half (49%) of investors said they have less confidence in the banking sector following the high-profile collapses of Silicon Valley Bank and Credit Suisse earlier this year. A greater number of investors (55%) were worried that these events will further harm the UK’s economy.

The investor study also revealed that 32% of retail investors saw their investments negatively impacted by the banking collapses.

“The banking collapses of recent months have added doubt and uncertainty to an already testing economic climate, with runaway inflation and rising interest rates posing questions for investors and their portfolios,” commented Shojin CEO, Jatin Ondhia.

“Our research shows that UK retail investors are wary of how the shockwaves from a banking crisis could impact both their investments and the wider economy.”

Elsewhere, the research found that 44% of investors are less confident in traditional investment classes than they were a year ago, while 36% said that alternative asset classes are likely to play a bigger role in their investment strategies. This was particularly true for younger investors, with the figure rising to 55% amongst those aged between 18 and 34.

According to 37% of investors, diversification is going to play a bigger role in their investment strategies over the coming year.

Ondhia added: “Crucially, Shojin’s study highlights some of the actions that retail investors are taking amidst this turbulence in the banking sector. For one, diversification is clearly going to be a key trend – investors are likely to rebalance their portfolios in the coming year. What’s more, the research suggests many will look towards alternative asset classes rather than traditional ones in a bid to diversify their investments.”

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