Share ownership falling under financial planners' watch

Research conducted by the Australian Securities Exchange (ASX) has found that while shareholders are increasingly relying on financial planners for advice, investors with links to financial planners are reducing their exposure to shares.

The ASX 2008 Australian Share Ownership Study has shown that the level of overall share ownership by Australians has fallen for the second consecutive period, falling from a high of 55 per cent in 2004 to 41 per cent in 2008.

The ASX report found the major decline in share ownership came from the group of investors who own both direct share investments and managed fund investments.

Investors with both direct and indirect holdings tended to come from the professional, university-educated sector and have links to financial planners, the report found. They were less likely to be self-directed investors and more likely to base their decisions on professional advice.

This group reduced their exposure to shares to 41 per cent in 2008, down from 46 per cent in 2006 and 55 per cent in 2004.

In the survey conducted at the end of 2008, 34 per cent of respondents turned to their planner as a source of advice and information, compared to 26 per cent in 2006. Planners also took the lead in terms of being the key source of advice and information for shareholders, with 19 per cent pointing to their planner as their preferred source in 2008 compared to 16 per cent in 2006. Of those respondents who had bought or sold shares in the last two years, 19 per cent conducted the transaction through a planner, compared to 12 per cent in 2006.