From increasing SMSFs to new technologies being used in financial services, there have been many changes in the past year, a trend which will continue.
Deloitte Access Economics prepared the 2017 ASX Australian Investor Study earlier this year. The study surveyed over 4,000 Australian residents online, in order to shed some light on investor behaviour in Australia.
The study asked how the investor landscape is changing, who is investing, and how and why they are doing so.
Here were some of their findings:
What is the current Australian investor landscape?
According to this study on Australian investor habits, 60% of Australian adults use some form of professional advice in making their financial decisions. Likewise, another 60% have made investments outside of their superfund.
More and more young people are making investments and accessing professional advice than ever before, and more people are usings SMSFs.
As trends move closer to technologies such as robo-advice, this study makes suggestions about where the world of investment is going in the future.
Self-managed superannuation funds (SMSFs) are one thing this study reported will grow even more in the following year/s. Just 15% of adults claim to have an SMSF already, and over 30% of those who do not are planning to set one up.
Another development will be a growing number of younger investors. Over the past five years, the number of investors between 18 and 24 has doubled, growing to 20%. Of those between 25 and 34, it has grown from 24% to 39% investing.
What are Australians investing in?
Australians generally go for simple and safe investments – they don’t like risk and generally don’t seem to go for more diverse shares.
The study reported that there are two things where Australians differ to global statistics. They generally don’t understand diversification properly, and are a generally very risk averse population.
46% of Australian investors claim to be diversified, yet they hold just 2.7 investment products. 40% say they aren’t diversified and hold 1.6 investment products. 15% don’t know if they’re diversified and 75% of share owners hold Australian-only shares.
Risk Adversity/Risk Management
Globally, 66% of investors are willing to increase their risk profile. Even with the opportunity to earn more income, Australians generally remain unprepared to do so. Just 29% of Australian adults said they would be willing.
Who makes up this population of risk averse Australian investors?
Most young investors are highly risk averse, to a greater extent than older investors. 81% of investors under 35 seek stable investment returns. This figure drops to 41% in the over 55 age bracket.
The study showed a disconnect between investors’ expectations for returns and their risk profiles.
This study also delved into the world of robo advice, asking how Australian investors are looking at it. They found that the majority said they didn’t know enough about robo advice to seriously consider it.
However, younger people were much more willing. 15% of investors aged between 18 and 24, and 24% between 25 and 34, would be willing to use robo advice. This willingness seems to decrease, the older the investor is.
What about the non-investors, otherwise known as potential investors? For those who have left investing, 84% said they intend to return to investing.
This study revealed that most cited a lack of money or a lack of confidence in their own ability as reasons why they’ve never invested.
To read the full report, go to ASX Investor Study 2017.