Around half of investors make their own investment decisions
Most retail investors rely on themselves, their friends or family or the media for investment advice rather than seeking advice from a financial planner or stockbroker, according to a study by Goldman Sachs Asset Management (GSAM).
Based on a survey of 1000 Australian retail investors, the report found that 44 per cent of investors relied on themselves and did not trust anybody else with their investment decisions, while 25 per cent listened to investment tips from commentators, experts or spokespeople on television, radio or the internet. Another 14 per cent accepted advice from friends or family.
Only 17 per cent of those surveyed relied on the expertise of a planner, GSAM stated.
According to GSAM head of third party distribution Jessica Jones, this compares to 73 per cent of retail investors in Germany who rely on advice from banks or financial advisers.
"This is significant for a number of reasons, not least because of the incredible growth we're seeing for the self-managed superannuation fund market in Australia," she said.
"We think it is critical that we as an industry have a huge role to play to make sure people are informed, thinking about diversified portfolios and keeping abreast of what's happening in the market."
While cash and term deposits reign supreme in portfolio construction, 56 per cent of respondents expressed an above-average focus on Australian equities, with 49 per cent of respondents also predicting above-average returns for equities moving into 2013.
This optimism in the equities market mirrors the sentiment on Australia's economy, with most investors (43 per cent) expecting growth of between 0 and 2 per cent and another 30 per cent predicting growth between 2-4 per cent.
"Despite all this confidence it's not actually translating into Australians' investment intentions for 2013," Jones said.
She said investors were found to be quite narrow in focus when it came to their portfolio allocation.
The survey found that while 67 per cent of investors saw fixed interest as a 'safe haven' asset, around half maintained a below-average focus on the asset class over the last 12 months.
Recommended for you
Marking off its first year of operation, Perth-based advice firm Leeuwin Wealth is now looking to strengthen its position in the WA market, targeting organic growth and a strong regional presence.
Financial services software firm Iress has unveiled a new business efficiency program with the aim of permanently lifting its profit margin as the business enters a leaner, growth-focused phase.
AUSIEX has revealed the top traded stocks for October, noting significant jumps in advised investor trading, while ETFs also reported higher activity.
The Financial Advice Association Australia has implored advisers to reevaluate their exposure to AML/CTF obligations ahead of new reforms that will expand their compliance requirements significantly.
