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Gut feeling: online investors following their nose

online investors following their nose

The number of Australians investing online is at a seven-year high, with many of these investors relying on their investment instincts, a new report reveals.

Investment Trends latest online broking report revealed that 645,000 Aussies placed at least one share trade in 2017, marking the highest number since December 2010.

At the same time, online investors are presenting a challenge for brokers looking to educate them on the investment decisions they’re making.

Research director at Investment Trends Irene Guiamatsia explained, “2017 was a positive year for retail online investing in Australia, with investor numbers rising to their highest level in the post-GFC era.

“At the same time, the All Ords also soared, providing strong support to the growth of the market.”

However, she continued, many DIY investors are relying on their gut to influence their investment decisions.

“Recent healthy sharemarket performance has strengthened their 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,” explained Ms Guiamatsia.

The Investment Trends report noted that investor outlook for domestic equities increased over 2017, as individual investors who considered that stocks were undervalued began investing online.

This trend marked a departure from the historical catalysts for investment action, like downsizing or retirement.

Investors were also more likely to switch online brokers, with 29,000 changing brokers. That’s a 10,000 increase on the 19,000 in 2016.

The most satisfied clients tended to be with Bell Direct, CMC Markets Stockbroking and IG, Investment Trends revealed.

Bell Direct achieved top spot for overall satisfaction followed by CMC Markets Stockbroking, and IG took out the bronze, overtaking CommSec.

Bell Direct was also best in terms of customer service and education materials, while CMC Markets Stockbroking was recognised for value for money and website functionality.

CommSec also received a nod for best mobile platform.

However, Ms Guiamatsia conceded that “industry-wide client satisfaction has plateaued in 2017”.

The report was based on a survey of 10,589 traders and investors.

Gut feeling: online investors following their nose
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