If by "investors" you mean everyday laymen who wanna make a quick buck and saw a "Binance" ad in YouTube, then yes. But, if you don't, then I think you underestimate serious investors. I believe every serious investor in Bitcoin is capable of protecting a seed phrase. Not only that, but I believe they are aware of what happens to their money if the central broker goes out of business.
Speaking out of experience with my interaction with serious investors, they don't invest into stuff they don't understand. Buying bitcoin and keeping it in an centralized exchange means you don't understand it.
But serious investors invest
serious money which most people wouldn't trust to physically hold in their hands where it can be lost or stolen. Most people invest their life savings in an account
in their name so it can't be taken from them no matter what.
(And let's get real here: the "big boys" of investing of Bitcoin right now are playing with a placeholder they see having market momentum leading to increases in the selling price--they don't care about the technical details. It might as well be
Teldar Paper).
Any institution can lose your money, and consumers know that, but even with the occasional problems, they still trust institutions who make it their job to safeguard people's money instead of their own physical guard.
Not too many people bury their life savings in the backyard or under the mattress, and not many hold their own private key they could lose when there's serious money on the line.
(My article,
The Anon Paradox, points out the seeming paradox between wanting anonymity for "small" amounts of money like the cash in your wallet versus "big" amounts e.g. your savings, car or house wherein anonymity is actually a
bad thing for most people).