Self directed CMT investors in decline

The proportion of self directed investors is on the wane, according to a new study by Macquarie Investment Management.

According to statistics from Macquarie's cash management trust in 1997, 21 per cent of new CMT investors were self directed investors, whereas in 2000, this figure had diminished to 16 per cent. This raises the percentage of new advice seeking investors in this period from 79 per cent to 84 per cent.

When broken down into genders, the percentage of advice-seeking women investing in CMTs increased slightly more than men, from 79 per cent in 1997 to 85 per cent in 2000.

But younger investors appear more likely to act on advice from family members - 50 per cent of men under 35 and 39 per cent of women of this age. This contrasts markedly with the over-50s, who prefer to consult a financial adviser (49 per cent of men and 44 per cent of women).

Younger investors are the fastest growing group of clients investing in cash management trusts, having doubled in the three years since 1997, according to the research.

A Macquarie spokesperson says that traditionally, Macquarie's client base for CMTs has been skewed towards retirees, partly because this group is more likely to have more money to invest and also because it shows more savvy when it comes to investments.

The figures show that in 1997, 9 per cent of the total CMT investors was comprised of under 35-year-olds, while in 2000, this figure had shot up to 16 per cent of Macquarie's 140,000-strong client base.

"What we now see is a trend towards younger age groups because younger people are getting better educated about investing, and because of their involvement in newer business such as in the dot com boom," she says.

Meanwhile, the number of new, advice-seeking over-50s investors declined from 65 per cent in 1997 to 53 per cent in 2000. Middle-aged investors in the 35-49 category remained steady in the three years to 2000 at around 30 per cent.