63% of personal investors would vote to leave the EU – up from 44% in August 2015 – despite concerns of the impact on the stock market

Having seen the proposed reforms emerging from David Cameron's EU negotiations, nearly two thirds of personal investors would now vote to leave the EU, according to major new research from The Share Centre.

The research, with responses from just over 2,000 personal investors, asked their views on the forthcoming EU referendum and followed research in August 2015 when many of the same questions were posed demonstrating the substantial shift in opinion which has followed the publication of the draft reform proposals. In 2013 David Cameron set out his objective of achieving "fundamental and far-reaching change" in the EU and in the UK's relationship with the EU. The package of reform proposals falls far short of this in the eyes of personal investors. When asked whether, if agreed, the draft proposals would materially change the UK's relationship with the EU, 76% said no. Indeed, when asked whether David Cameron had been successful in obtaining concessions for the UK, 72% said no.

This highlights a strong view amongst personal investors that David Cameron has failed in his objective of achieving fundamental and far-reaching change. Whilst back in August 2015 30% of investors thought David Cameron would be successful in obtaining concessions, today only 16% think he has been.

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In The Share Centre's research in August 2015, changes to EU regulations were high on the list of demands from the renegotiations, with 70% of respondents saying they believed the origination of Financial Services regulation should come back to the UK. This is absent from the proposed reform package.

Immigration is cited as the major issue of the day, and it has clearly influenced personal investors too. 52% said the recent immigration issues in the EU had made them more likely to vote to leave. However, in a ranking of key issues, when asked what was the main factor influencing their decision on how to vote, personal investors ranked sovereignty (32%), the impact of EU regulations (28%) and economic issues (23%) all ahead of immigration (17%).

With economic issues clearly being important, nearly 1 in 5 personal investors (19%) say recent global economic volatility had made them more likely to vote to leave the EU – this compared to 1 in 10 (11%) saying it had made them more likely to vote to stay.

Personal investors are clearly prepared to vote to leave even if the impact of such a vote on the stock market is negative. 49% of those questioned were concerned about the impact of the referendum outcome on the stock market – this was down from 59% in August 2015 reflecting perhaps the impact of recent stock market falls.

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Over a third of investors have changed their investment behaviour, or plan to do so, ahead of the referendum. Twice as many investors now as compared to August 2015 (11% v. 6%) are already changing their investment behaviour.

This is not surprising given that 58% believe that a vote to leave would have either a largely (20%) or slightly (38%) negative impact on the stock market as compared to 20% who believe it would have a positive impact. Again, this response has shifted since August 2015 when 63% indicated they believed a vote to leave would have a negative impact on the market.

Despite the anticipated negative effect on the stock market, investors are still prepared to vote to leave. They are clearly prepared to look beyond their investment behaviours to the impact on the UK as a whole. 60% of respondents now believe that a vote to leave would be largely (39%) or slightly (21%) positive for the UK as a whole. This is up from 44% in August 2015 again demonstrating the substantial shift in opinion in the last six months.

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Richard Stone, Chief Executive of The Share Centre commented:

"When we asked investors for their views on the EU referendum question in August 2015, ahead of the renegotiations, a majority said they would vote to stay in. Most respondents felt a vote to leave would have negative impacts on the UK and the stock market, and many were optimistic about David Cameron's prospects for negotiating meaningful changes to the UK's relationship with the EU. Now the draft reform proposals have been published there has been a dramatic shift in opinion in favour of exiting.

"The strength of support for a vote to leave, the shift since August 2015, and the fact that a significant majority of investors now believe a vote to leave would be positive for the UK as a whole, is really significant. Recent market and global economic volatility has made investors more likely to vote to leave and lessened fears over the impact of a vote to leave on the market – indeed, the responses could be interpreted as suggesting investors believe the UK would be better positioned to weather such storms outside of the EU. Concerns about the potential impact on stock markets have lessened but persist, however, there is no doubt that this group of voters – an important part of the UK electorate – are strongly supporting an exit.

"Finally, with the end of the tax year approaching, a significant proportion of investors (just over 1 in 3) is telling us they are either already changing their investment decisions or plan to do so. With decisions to be made about whether to invest more in ISAs or pensions and if so what investments to then purchase, investors may feel between a rock and a hard place given that interest rates also look like staying lower for longer now and so cash will continue to deliver little in the way of a return."

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