OREANDA-NEWS. The correct answer to what investment is can be provided by less than 30 percent of Lithuanians, those who invest make up about 20 percent of the population, and the absolute majority expect to be supported financially at the expense of the state when they reach retirement age. This was demonstrated by a survey of the Lithuanian population performed by the market and opinion research centre Vilmorus and carried out on the request of AB SAMPO bankas, reported the press-centre of AB SAMPO.  

"Despite the twofold annual growth in the amount of investments in Lithuania, growth is influenced by the rather weak distribution of investment services that existed before the end of the past year, meaning that even with current growth we are lagging behind the developed countries tenfold. At the same time, the lack of knowledge and competence may become the major restraint to the long-term development of the investment market", Darius Kuzmickas, director of Investment and Savings Services Department at AB SAMPO bankas, warns.

According to data provided by the Lithuanian Securities Commission, the investment fund portfolio publicly on offer in Lithuania in the 12 months prior to 30 June of this year showed a twofold increase and reached LTL 1,98 billion. The portfolio of the 2nd pillar pension funds also increased twofold, reaching LTL 1,26 billion. The same increase showed the 3rd pillar pension fund portfolio reaching LTL 82 billion.

"We expected such a rate of growth in the investment market. For the next ten years however, we will hardly be able to speak about market saturation since we are currently just at the initial stage of growth. Let's compare: the investment fund of the first 15 countries of the European Union amounts to 68 percent of GDP, whereas in Lithuania it is only 4,5 percent of GDP", Mr. Kuzmickas points out.

According to the director, in order to provide a base for the long-term growth of the investment market, we should all learn more about investment. Many inhabitants of Lithuania do not yet comprehend the necessity to invest money for the future. The survey carried out on the request of AB SAMPO bankas showed that 701 respondents out of 1001 thought that the state would have to take care of currently employed individuals 18-50 years of age after their retirement.

There is also the lack of knowledge about the risk of investment. Nearly 50 percent of the population would like to put the risk onto the state or the investment management company and only 14% would take the investment risk themselves.

According to Mr. Kuzmickas, this points to the fact that we lack both experience and basic knowledge about investing, which could become a serious hurdle to the investment market unless appropriate measures are taken.

Yet there are signs that the situation is changing for the better. Both the public and private financial sectors are allocating more resources to educate investors, and the mass media is paying more attention to the area of investment. State institutions have also been improving legal regulations for investment services, and thus the rules of the game are becoming more comprehensive and transparent to investors. The latest example is that of the confirmed status of the companies providing independent financial advice. Such companies will not be selling investment products to the population but will only provide recommendations and advice about where to invest.

"The education of the population and more comprehensive regulation of investment rules are the directions to be followed. This could become the basis for long-term and consistent expansion of the investment market", the director of the Investment and Savings Services Department at AB SAMPO bankas concludes.