Advisers still shun listed investments for funds
Researchconducted by theAustralian Stock Exchange(ASX) reveals managed funds are still the leading investment vehicle for advisers, despite the fact that many are well educated about the range of listed investments available.
According to the survey, managed funds form the standard offering for many advisers, with cash and property making up the rest. At the same time, listed investments are perceived as peripheral, despite the fact they are seen as a way to add value and provide more choice for clients.
However, the ASX survey found 89 per cent of planners do use some kind of listed investments in client portfolios, of which listed property was the most used (80 per cent) followed by Australian shares (65 per cent).
All other listed investments, such as listed investment companies, warrants and bonds only used by 20 to 30 per cent of advisers.
The reason for the low usage of listed investments was attributed to the popularity of managed funds, which were found to be better understood, less time consuming and boasted an established and recognised remuneration structure.
The survey found advisers believed managed funds would always outperform other investments over the long-term and more than half (55 per cent) said they did not recommend shares because they were not licensed to do so.
However, it also found that while there was a good understanding regarding Australian shares and listed property trusts, with more than two-thirds of planners stating they understood the products, similar numbers expressed an indication in learning more about them.
AUTHOR
Jason Spits
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