Research points to growth in self-directed investment
The Australian self-managed superannuation fund (SMSF) sector is not the only self-direct financial services segment showing rapid growth, with US-based research and advisory firm Celent releasing new research covering self-directed investors in the stock broking space.
The research, released this week, suggests annual overall growth rates in the so-called "self-directed investor market" will be around four to five per cent over the next two years.
However it said this comparatively modest growth rate was primarily due to slow growth in the traditional investor market and that "growth in the active investor and active trader markets will exceed traditional investor growth".
"This will continue to change the balance of the self-directed market, with 43 per cent of the market comprising active investors, and 6 to 6.5 per cent comprising active traders by the end of 2014."
The Celent research said new models of service were emerging among the discount brokerages, with the larger online brokerages focusing extensively on retirement and managed account products.
"In the retirement space, they offer self-directed tools such as net worth analysis, asset allocation, planning calculators/tools, and portfolio analysis/monitoring," it said. "Firms are also emphasising hybrid models of service in which investors can contact an adviser for a portfolio/asset allocation analysis, for investment recommendations, and to validate or analyse a retirement plan."
Celent said that, where possible, brokers were cross-selling investors into managed account products.
The research claimed bank brokers were becoming increasingly engaged in the online channel.
"To stem asset outflow to discount brokers, many bank brokers are enhancing online trading tools," it said. "They have a distinct advantage insofar as these banks have a pre-existing client base. In addition, bank brokers have an advantage with cross-selling, since they already offer retirement services, full service advisory, and managed account products."
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