Keep it simple: Rickard
Simplifying managed funds is the key to getting investors purchasing them online, according to Commonwealth Securities director Paul Rickard.
"It is complex to understand the thousands of managed funds available with even limited amounts listed in the press. How is that simplified for the self directed investors?" Rickard asks.
Rickard says the first step is to show the top performing funds based on selected criteria. The focus is then moved to pricing issues with consumers weighing up whether to use an adviser or be self-directed.
However, Rickard also says the growth in online trading is driving interest for offshore equities trading.
"We have seen a shift in direct share trading to overseas equities. For example, half of New Zealand's investors are involved in the Australian stock market," Rickard says.
"The same is common with Australian traders when big companies head overseas or are there. People are tapping into the idea of globalisation and appreciate the local market size is infinite."
E-Trade group chief executive officer Kerry Roxburgh says the shift to a wider view will occur alongside the work of the planner.
"The expansion of product lines along with ratings and research will support the planner's role," Roxburgh says.
"The planning industry will thrive and as regulations change, more people will enter. As a market for managed funds is established, the role of advice and growing the investments of users will become a serious business."
However, both agree that the trend towards further online investing is not easy but has the potential to be a very useful method of business.
"Shares are popular, as the service is dynamic and investors can see real growth in wealth and may move into managed funds. However, the e-tailing of those will be tough due to price and brand concerns. The money will be made in the delivery systems," Rickard says.
"Since delivery systems are electronic, there is no physical product and handling, and as such, the sweet spot for e-tailing will be in financial transactions. Those suppliers who work in groceries and books will find it hard yakka," Roxburgh says.
AUTHOR
Jason Spits
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