The active investor population has surpassed one million for the first time, while environmental, social and governance (ESG) factors matter more and investors demand more from online brokers, according to the ‘2020 1H Online Investing Report’ from Investment Trends.
Between December 2019 and June 2020, the number of active online investors grew by 41% from 750,000 to 1.06 million.
Recep Peker, research director at Investment Trends, said it was driven largely by a record inflow of 265,000 first-time investors.
“First-time investors typically consist of young Australians in the Zoomer or Millennial age group, but the pandemic-induced lockdown has accelerated these trends,” Peker said.
“This year, the vast majority of first-time investors are under the age of 40 (70%), which represents a significant shift from last year (51%).
“Many first-time investors were attracted by buying opportunities presented by the market sell-off earlier this year, while the ability to start investing with small amounts was also a catalyst for many.”
A quarter of investors (24%) said they had bought or sold investments based on environmental impact, as well as ethical and corporate governance factors (17% each), and social issues (9%).
“There is strong appetite for investments that demonstrate good ESG standards, and the desire for investors to align their investments to their values, goals and aspirations is notable across all age segments,” Peker said.
Despite the competitive brokerage landscape, most online investors are prepared to pay their main broker to access more features and services.
“Low cost remains a strong driver for selecting an online broker, but the quality of service and support also matter,” Peker said.
“Industry wide, 63% of online investors are willing to pay their main broker for additional features, highlighting their demand for greater support.
“As the top of their wishlist is stock research or more advanced analysis, tax tools and live pricing.”
For the first time, CommSec Pocket was first in overall satisfaction with 57% of clients rating it as “very good” overall, followed by Stake (47%) and SelfWealth (40%) in the top three.
