Planners take international position as local confidence shaken
Vanguard is the most used fund manager by Australian financial planners, as planners seek greater diversification and cost effectiveness of their client portfolios.
This was one of the key findings to emerge from the Investment Trends August 2015 Adviser Product and Marketing Needs Report, as planners increasingly turn to international investments as confidence in the Australian share market wanes.
Coming in second was Colonial First State, with Magellan and Platinum sharing equal third place.
Commenting on the results, Investment Trends Head of Research for Wealth Management, Recep Peker said the confidence of planners in the Australian share market had fallen as a result of the continuing volatility of the local share market, with planner expectations of share market returns at "the lowest level we've ever observed — even lower than during the depths of the GFC in late 2008".
As at August 2015, the report found that planners expect domestic stocks to deliver, on average, capital gains of 6 per cent over the coming 12 months, down 2 per cent from the 2014 study.
Peker said this concern over returns and stock picking had seen more planners retreating to traditional unlisted managed funds and ETFs for new client inflows.
"This is a reflection of planners increasingly prioritising diversification and low cost when selecting investments for their clients," Peker said. "Notably, financial planners' usage of passive managed funds - which provide low cost access to diversification — for new client money is at record levels."
According to the report's findings, the usage of international assets by planners for clients also hit a new high, which Peker said was another outcome of the challenges faced in the domestic market. The report found that planners invested 39 per cent of new client investments into international assets over the last 12 months, which was the highest level since the start of this study back in 2008 — a 13 per cent increase on the 2012 result.
"Financial planners have been very responsive to their clients' needs, and have been increasing their allocation to international investments, since client appetite began to return for international assets in 2012," Peker said.
The results of the Investment Trends 2015 Adviser Product and Marketing Needs Report was based on a survey of 676 financial planners in August 2015.
Recommended for you
Selfwealth has provided an update on the status of its scheme implementation deed with Bell Financial Group as well as whether rival bidder Svava remains in the picture.
Magellan Financial Group has reported its first half FY25 results while appointing a new chief financial officer and promoting Sophia Rahmani to chief executive.
Schroders Australia has launched two active ETFs and plans to further expand its listed range over the year ahead.
Platform Netwealth has reported its financial results for the first half of FY25, reporting an 80 per cent increase in net flows, with its CEO viewing a “huge opportunity” from private assets.
