Investor distrust in fund managers lingers
A lack of confidence in financial institutions has pushed clients towards direct investments, according to a new report by industry market researcher, Investment Trends.
New data is consistent with Investment Trends’ research showing trading shares online rose by 50,000 over the last year to a new high of 650,000 in May 2010.
Senior analyst with Investment Trends, Pawel Rokicki, said life is challenging for fund managers at the moment, but rising interest in direct investments “clearly benefits providers of online share trading.”
“During [the global financial crisis], [investors] realised that money they spent on active management is not necessarily bringing them value; increased share trading is a result of that,” he said.
In July 2009, more than half of surveyed participants hinted they no longer trust fund managers and would invest directly in future.
Rokicki said unreleased figures from this year’s ‘Investor sentiment and communications’ report revealed there is a lack of trust in fund managers.
“Financial planners intend to put more of clients’ funds into direct equities, so this trend was consistent in the advice and direct channel,” Rokicki added.
AUTHOR
Milana Pokrajac
Recommended for you
Pendal has told investors it will start winding up its Enhanced Credit fund from December, its third fund closure this year.
A potential acquisition of Platinum Asset Management by Regal Partners will be beneficial for the “challenged” fund manager, believes Morningstar, but it has warned fund management mergers don’t always run smoothly.
Fund managers made a “big shift” into bond-sensitive sectors like utilities in September and away from cyclicals, while risk appetite is at an 11-month low.
Ahead of the RBA’s upcoming monetary policy meeting next week, BlackRock Australasia has reaffirmed the market’s view that rate cuts are likely out of the picture for 2024.
