Invest
One in two Australian retail investors trust financial services industry
The results of a global survey have been released.
One in two Australian retail investors trust financial services industry
One in two Australian retail investors (45 per cent) trust the financial services industry, a new survey by the CFA Institute has revealed.
The study also found that globally, trust in financial services has reached an all time high with 86 per cent of institutional investors saying they have “high” or “very high trust”; up from 65 per cent in 2020.
Specifically with retail investors, trust levels increased from 46 per cent to 60 per cent and were highest in Australia, the US and Singapore.
The five key factors which saw investor trust surge included the strong share market performance, fee compression on investment products, the greater level of technology-enabled transparency on investment products, greater investor access to investment markets and new personalised investment products such as ones that consider ESG factors.
“The highs we’re now seeing in investor trust are a cause for optimism, helped on by strong share markets and falling fees, but the challenge is sustaining trust moving ahead given greater levels of share market volatility,” CFA Societies Australia CEO Lisa Carroll said.
“In Australia too, trust has jumped significantly since 2020 when just one in four investors trusted the financial services industry, with the Hayne Royal Commission eroding confidence in the asset management industry given the significant amount of negative news coverage at the time.
“Looking ahead, as interest rates rise this year and returns fall on asset classes such as equities and property compared to previous years, investment product providers and financial advisors may be more challenged maintaining trust levels with their clients. Technology, the alignment of values, and personal connections with investors can, however, help.”
The survey also noted that Australian retail investors with a financial adviser are more trusting of the industry (58 per cent), compared to less than half without an adviser (39 per cent) and agree that having an adviser adds value.
Around 85 per cent agreed that there is fair opportunity to profit by investing in capital markets (an increase from 81 per cent in 2020), compared to 72 per cent of those without an adviser (an increase from 57 per cent in 2020). Among Australian retail investors, 86 per cent agreed that there is a fair opportunity to profit.
However, the research found that Australian retail investors are still less trusting of advising than their global peers.
“Most investors followed the advice of their adviser during the March 2020 downturn. Among those who were advised to significantly or slightly reduce risk/exposure to the market, 88 per cent and 77 per cent reduced risk, respectively,” Ms Carroll explained.
“Among those who were advised to significantly or slightly increase risk/exposure to the market, 75 per cent and 64 per cent did increase risk as advised. However, 21 per cent and 24 per cent reduced risk, respectively.
“Overall, having a trusted adviser to inform client decisions in stressed market conditions helped investors stick to their long-term investment plans.”
The biggest reasons that Australian retail investors would leave an adviser would be due to underperformance (51 per cent), a lack of responsiveness (37 per cent), inadequate data security (35 per cent) and high fees (35 per cent).
Investment insights
Fed doves cheered by soft US jobs data, but inflation concerns linger
Friday's US jobs data brightened the mood among Federal Reserve (Fed) doves, as the nonfarm payrolls (NFP), unemployment rate, and wages all pointed to a slowing labour market in April, according to ...Read more
Investment insights
Fed rate cut expectations in doubt as inflation concerns persist
Investors are bracing for a less-than-cheerful Federal Reserve (Fed) monetary policy decision later today, as the central bank grapples with three straight months of rising inflation, which may force ...Read more
Investment insights
Centuria announces senior internal promotions, strengthening leadership team for new property growth cycle
Centuria Capital Group (ASX: CNI or "Centuria") has strengthened its senior management structure with several internal promotions, effective from Monday, 15 April 2024. The new senior roles are part ...Read more
Investment insights
Institutions and wealth managers favour fixed income over equities, research shows
New research from Managing Partners Group (MPG), the international fund management group, shows professional investors believe fixed income is becoming more attractive than equities over the next 12 ...Read more
Investment insights
Gold prices soar to record high: Two surprising factors fueling the surge
Gold prices have hit a fresh record high, nearing $2,300 an ounce in Thursday trading, and while geopolitical tensions and expectations of interest rate cuts by the US Federal Reserve are commonly ...Read more
Investment insights
Alternative fund managers expect increased fines for regulatory breaches, survey reveals
A new study by Ocorian, a market leader in regulation and compliance services, has revealed that alternative fund managers anticipate a rise in fines for breaking regulations in their sectorsRead more
Investment insights
Institutional investors set to increase allocations to illiquid assets, MPG research reveals
A new study by international asset management company Managing Partners Group (MPG) has found that more than three-quarters (78%) of institutional investors and wealth managers plan to increase their ...Read more
Investment insights
Vanguard reduces management fee for its Australian Government Bond Index ETF
Vanguard Australia has announced a reduction in the management fee for its Vanguard Australian Government Bond Index ETF (ASX:VGB) by four basis points to 0.16% per annum, effective from Monday. Read more
Investment insights
Fed doves cheered by soft US jobs data, but inflation concerns linger
Friday's US jobs data brightened the mood among Federal Reserve (Fed) doves, as the nonfarm payrolls (NFP), unemployment rate, and wages all pointed to a slowing labour market in April, according to ...Read more
Investment insights
Fed rate cut expectations in doubt as inflation concerns persist
Investors are bracing for a less-than-cheerful Federal Reserve (Fed) monetary policy decision later today, as the central bank grapples with three straight months of rising inflation, which may force ...Read more
Investment insights
Centuria announces senior internal promotions, strengthening leadership team for new property growth cycle
Centuria Capital Group (ASX: CNI or "Centuria") has strengthened its senior management structure with several internal promotions, effective from Monday, 15 April 2024. The new senior roles are part ...Read more
Investment insights
Institutions and wealth managers favour fixed income over equities, research shows
New research from Managing Partners Group (MPG), the international fund management group, shows professional investors believe fixed income is becoming more attractive than equities over the next 12 ...Read more
Investment insights
Gold prices soar to record high: Two surprising factors fueling the surge
Gold prices have hit a fresh record high, nearing $2,300 an ounce in Thursday trading, and while geopolitical tensions and expectations of interest rate cuts by the US Federal Reserve are commonly ...Read more
Investment insights
Alternative fund managers expect increased fines for regulatory breaches, survey reveals
A new study by Ocorian, a market leader in regulation and compliance services, has revealed that alternative fund managers anticipate a rise in fines for breaking regulations in their sectorsRead more
Investment insights
Institutional investors set to increase allocations to illiquid assets, MPG research reveals
A new study by international asset management company Managing Partners Group (MPG) has found that more than three-quarters (78%) of institutional investors and wealth managers plan to increase their ...Read more
Investment insights
Vanguard reduces management fee for its Australian Government Bond Index ETF
Vanguard Australia has announced a reduction in the management fee for its Vanguard Australian Government Bond Index ETF (ASX:VGB) by four basis points to 0.16% per annum, effective from Monday. Read more