Reliance on advice “alarmingly low”
Australian investors would rather listen to investment tips from media commentators than their own financial adviser, according to a survey conducted by Goldman Sachs Asset Management (GSAM).
The GSAM annual Australian Retail Investor Survey for 2013, which involved 600 investors, shows only 10 per cent relied on their financial adviser to make investment decisions over the past year, compared to an already low 17 per cent in 2012.
GSAM has regarded this level of reliance on independent financial advice as "alarmingly low".
More investors prefer to rely on investment tips from media commentators and experts when making investment decisions, with an increasing number also relying on friends, relatives and colleagues.
"This is particularly concerning given the clear signal from investors that their knowledge and understanding of certain asset classes could be improved," said Jessica Jones, managing director and head of third party distribution at GSAM.
Respondents admitted to low understanding of most asset classes — with the exception of Australian equities and cash or term deposits.
An overwhelming 90 per cent of retail investors said they would either would not invest in an asset class they did not understand or that they would not feel comfortable doing so.
"There is a real need and opportunity for advisers to engage with retail investors to help them better understand risk and diversification," she added.
Confidence in the Australian economy has significantly improved since 2012, with more than a third of investors expecting a 10 per cent return or higher in the next three years — compared to 19 per cent in 2012.
However, they are not willing to assume greater risk to achieve return objectives, the survey found.
AUTHOR
Staff Writer
Recommended for you
The balance of ASIC enforcement activity is skewed towards civil rather than criminal cases, but the corporate regulator says it is seeking to redress this balance.
From gym owner to working with private wealth advisers, Shadforth’s Joel Perryman shares his top recommendations for career changers looking to transition into the financial advice profession.
The Responsible Investment Association of Australasia has launched a toolkit to help advisers address the risks presented by artificial intelligence.
AMP’s North platform has partnered with BlackRock and Lonsec to expand its suite of managed portfolio solutions, further democratising advisers’ access to these products.
