Retail online investments climb

Improving market sentiment has seen retail online investor numbers climb to a record high, with Investment Trends finding that 645,000 Australians placed at least one share trade in 2017.

Based on a survey of 10,589 traders and investors, the Investments Trends 2017 Second Half Online Broking Report found that investor numbers rose to their highest post-global financial crisis (GFC) level last year, as a soaring All Ords market saw strong support for growth.

Traditional triggers for up-taking investments, namely lifestyle changes such as downsizing or retirement, did not play as large a role as the historically would have in such an increase.

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Instead, the report found that a rising outlook for domestic equities encouraged Australians who felt that stocks were undervalued to start investing online.

Investment Trends research director, Irene Guiamatsia said that many “DIY investors” relied on their gut to make decisions.

“Recent healthy share market performance has strengthened [individual investors] preference for making decisions this way. The challenge for brokers is to turn the horde of novice investors into educated clients who invest from a position of knowledge,” she said.

Online investors also showed increased recognition of innovations or improvements from their brokers, with awareness of this up 5 per cent compared to the previous six months.

“Online brokers are stepping up, and clients are taking notice,” Guiamatsia said.

This was likely due to more innovation but also better communication from brokers.

She said that switching between brokers was also increasing, with 29,000 clients leaving a broker to continue trading elsewhere in 2017, up 10,000 from the year before.

“Innovation recognition is traditionally higher among engaged clients who are also more likely to be on the lookout for better value,” Guiamatsia said. “And there are signs that brokers’ relentless focus on innovation is starting to have an impact.”

Bell Direct had the most satisfied clients of any broker, with CMC Markets Stockbroking challenging them from second place. IG overtook CommSec for third place.

Overall, client satisfaction with brokers largely plateaued in 2017.

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