Advised investors significantly better off than DIY cohort
The benefits of advisers are clear in Legg Mason’s 2018 Global Investment Survey, with advised investors significantly better off than the do-it-yourself (DIY), non-advised cohort.
Almost three-quarters (71 per cent) of advised investors felt confident about their investment opportunities in the coming 12 months, compared to just over half (55 per cent) of non-advised investors.
As well, advised investors also tended to have more balanced and diversified income assets than their DIY peers, with a spread of around 42.5 per cent in dividend paying shares, 22.8 per cent in rental properties, 17.5 per cent in bonds and 17.2 per cent in an “other” category.
This was compared to the non-advised spread of 52.1 per cent in dividend paying shares, 19.3 per cent in rental properties, 4.4 per cent in bonds and 24.1 per cent in an “other” category.
Looking at the use of advisers in general, 45 per cent of Australian investors said they used an adviser for the majority or all of their decisions, while 39 per cent rarely or never did.
Sixty-three per cent of advised investors and 61 per cent of non-advised investors were male, which also shows that a large majority of females just aren’t “active” investors.
Sixty per cent of millennials, which are generally stereotyped as lazy when it comes to seeking financial advice, said they used an adviser, which compares to 32 per cent of baby boomers.
Advised investors also tended to have higher investment knowledge than non-advised investors (43 per cent as compared to 32 per cent), and 42 per cent of advised investors viewed volatility as a potential positive as opposed to only 24 per cent of non-advised investors.
Asset allocation was also different between advised and DIY investors, with DIYs tending to have more cash (34.3 per cent as opposed to 25.3 per cent for advised investors), and much less fixed income (9.7 per cent as opposed to 17.5 per cent), with 58 per cent of DIYs holding zero fixed income assets.
Funds that incorporate environmental, social and governance (ESG) factors also benefit from advised investors, with 50 per cent choosing green funds as opposed to only 18 per cent of non-advised investors.
Over two thirds (66 per cent) of advised investors expected to make portfolio changes for retirement, whereas only 44 per cent of non-advised investors said they were unlikely to change their investment portfolio at all.
AUTHOR
Anastasia Santoreneos
Recommended for you
With an advice M&A deal taking around six months to enact, two experts have shared their tips on how buyers and sellers can avoid “deal fatigue” and prevent potential deals from collapsing.
Several financial advisers have been shortlisted in the ninth annual Women in Finance Awards 2025, to be held on 14 November.
Digital advice tools are on the rise, but licensees will need to ensure they still meet adviser obligations or potentially risk a class action if clients lose money from a rogue algorithm.
Shaw and Partners has merged with Sydney wealth manager Kennedy Partners Wealth, while Ord Minnett has hired a private wealth adviser from Morgan Stanley.
