Advised investors significantly better off than DIY cohort
The benefits of advisers are clear in Legg Mason’s 2018 Global Investment Survey, with advised investors significantly better off than the do-it-yourself (DIY), non-advised cohort.
Almost three-quarters (71 per cent) of advised investors felt confident about their investment opportunities in the coming 12 months, compared to just over half (55 per cent) of non-advised investors.
As well, advised investors also tended to have more balanced and diversified income assets than their DIY peers, with a spread of around 42.5 per cent in dividend paying shares, 22.8 per cent in rental properties, 17.5 per cent in bonds and 17.2 per cent in an “other” category.
This was compared to the non-advised spread of 52.1 per cent in dividend paying shares, 19.3 per cent in rental properties, 4.4 per cent in bonds and 24.1 per cent in an “other” category.
Looking at the use of advisers in general, 45 per cent of Australian investors said they used an adviser for the majority or all of their decisions, while 39 per cent rarely or never did.
Sixty-three per cent of advised investors and 61 per cent of non-advised investors were male, which also shows that a large majority of females just aren’t “active” investors.
Sixty per cent of millennials, which are generally stereotyped as lazy when it comes to seeking financial advice, said they used an adviser, which compares to 32 per cent of baby boomers.
Advised investors also tended to have higher investment knowledge than non-advised investors (43 per cent as compared to 32 per cent), and 42 per cent of advised investors viewed volatility as a potential positive as opposed to only 24 per cent of non-advised investors.
Asset allocation was also different between advised and DIY investors, with DIYs tending to have more cash (34.3 per cent as opposed to 25.3 per cent for advised investors), and much less fixed income (9.7 per cent as opposed to 17.5 per cent), with 58 per cent of DIYs holding zero fixed income assets.
Funds that incorporate environmental, social and governance (ESG) factors also benefit from advised investors, with 50 per cent choosing green funds as opposed to only 18 per cent of non-advised investors.
Over two thirds (66 per cent) of advised investors expected to make portfolio changes for retirement, whereas only 44 per cent of non-advised investors said they were unlikely to change their investment portfolio at all.
AUTHOR
Anastasia Santoreneos
Recommended for you
With regional and rural suburbs exhibiting high spare capacity to invest, Money Management speaks to three regional advisers on the opportunities beyond the major cities and the importance of a strong network.
Platform consolidation is expected to accelerate among financial advisers this year, as software company Finura pinpoints which two platforms are set to be the winners, thanks to this trend.
The software provider has made several appointments in its APAC wealth propositions team, with a focus on driving growth across digital advice, Xplan and strategic partnerships.
The platform has announced it plans to close its Xplore managed discretionary account service in 2026 which holds $2 billion in funds under administration.
