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1Copyright 2016 Investment Trends Pty Ltd. Feb 2016 How investor attitudes and product needs are evolving – Handouts. Confidential. Webinar attendee use only.
How investor attitudes and
product needs are evolving
Webinar Handouts
Contact: Recep Peker
Head of Research, Wealth Management
recep@investmenttrends.com.au
@recep3
Confidential. Webinar attendee use only
Reproduction prohibited
2Copyright 2016 Investment Trends Pty Ltd. Feb 2016 How investor attitudes and product needs are evolving – Handouts. Confidential. Webinar attendee use only.
Investor sentiment
Investors are being battered by share market volatility, poor Australian stock market return expectations and low interest rates, making it harder to identify domestic investment opportunities
3Copyright 2016 Investment Trends Pty Ltd. Feb 2016 How investor attitudes and product needs are evolving – Handouts. Confidential. Webinar attendee use only.
Methodology: Investor Product Needs Report
Online quantitative survey of Australian investors conducted in September and October 2015
Survey respondents were recruited in a number of ways:
1. Members of Investment Trends’ opt-in panel
2. Institutional clients including a variety of investor information providers, private banks, product providers, advice networks, online brokers and the ASX
Total responses after data cleaning and validation: n=9,793
Maximum sampling error (95% confidence interval, centre of the range): +/-1.0%
Analysis of subgroups will have a higher sampling error
Results of the report are representative of Australian investors.Compared to Australian adults, investors are more likely to:
• Have higher levels of investable assets
• Currently invest in direct shares, managed funds and/or residential property (excluding their own home)
• Be engaged with their super
4Copyright 2016 Investment Trends Pty Ltd. Feb 2016 How investor attitudes and product needs are evolving – Handouts. Confidential. Webinar attendee use only.
The impact of a Chinese slowdown on the Australian economy, high debtlevels and volatility weigh on investors’ outlook for 2016
China and debt slowing Australian economyInvestors’ top concerns
56%
50%
47%
37%
33%
32%
28%
26%
22%
22%
20%
19%
18%
13%
9%
4%
0% 20% 40% 60%
China slowdownAnother global financial crisis/
market crash
Australian economy
Global debt levels
Australian debt level
Share market volatility
Changes in resource value
Exchange rates/value of AUD
European economy
A military conflict
Interest rates
Property prices
US economy
Impact of regulatory changes
Inflation
Other
Nov-14 [n=790]
Nov-15 [n=490]
12 month market return expectationsVery bearish
Nov-12 Nov-13 Nov-14 Nov-15
6.6
5.4
6.1
Nov-12 Nov-13 Nov-14 Nov-15
7.7%
1.6%
3.2%
Steady at a moderately high levelInvestors’ concern levels (out of 10)
5Copyright 2016 Investment Trends Pty Ltd. Feb 2016 How investor attitudes and product needs are evolving – Handouts. Confidential. Webinar attendee use only.
In 2016, slightly more intend to focus on protecting their wealth rather than growth
Average portfolio allocation to cash and cash produ ctsModerate but did not increase despite volatility
Marginally more defensiveInvestment priorities for the next 12 months
Less risk tolerance among those not retiredRisk tolerance index
2010[n=5765]
2011[n=5214]
2012[n=7738]
2013[n=6468]
2014[n=7770]
2015[n=7209]
13%
14%
16%
17%
10%
13%
23%
26%
27%
34%
34%
34%
30%
28%
26%
29%
34%
33%
34%
31%
31%
19%
21%
20%
10% 36% 32% 22%
2009
2010
2011
2012
2013
2014
2015
Protect Income Balanced growth Maximum growth
Defensive Aggressive
14%
18% 17% 18%
15%
24%
46%
58%
55%
Accumulator/pre-retirees
52%51% All investors
45% Retirees
2013 2014 2015
Ris
k av
erse
Ris
k to
lera
nt
52%
48%
43%
6Copyright 2016 Investment Trends Pty Ltd. Feb 2016 How investor attitudes and product needs are evolving – Handouts. Confidential. Webinar attendee use only.
Appetite for overseas exposure was on par with domestic equities for the first half of 2015. The (net) appetite for international assets remains healthy
Source: November 2015 Investor Intentions Index Rep ort
Net Intentions Index by asset class (% planning to increase exposure - % planning to dec rease exposure)
22%
16%
8%
-1%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Sep-1
1Nov
-11
Jan-
12M
ar-1
2M
ay-1
2Ju
l-12
Sep-1
2Nov
-12
Jan-
13M
ar-1
3M
ay-1
3Ju
l-13
Sep-1
3Nov
-13
Jan-
14M
ar-1
4M
ay-1
4Ju
l-14
Sep-1
4Nov
-14
Jan-
15M
ar-1
5M
ay-1
5Ju
l-15
Sep-1
5Nov
-15
Australian shares International assets Term deposits/online savings accountInvestment property
Net
Inte
ntio
ns In
dex
XX
*Option added in Nov-12
7Copyright 2016 Investment Trends Pty Ltd. Feb 2016 How investor attitudes and product needs are evolving – Handouts. Confidential. Webinar attendee use only.
Acquiring new client relationships
Effective communications are key to client acquisition, referrals and retention for planners
8Copyright 2016 Investment Trends Pty Ltd. Feb 2016 How investor attitudes and product needs are evolving – Handouts. Confidential. Webinar attendee use only.
Methodology: Financial Advice Report
Quantitative survey July to August 2015
Core sample: n=2,543. Drawn from total responses: n=10,367.
Core sample has been weighted to be representative of the Australian adult population
Three sources of sample were utilised:
• Core sample:
• Broad-based survey of the Australian adult population
• Respondents from Investment Trends opt-in panel
• Additional respondents sourced from various super funds
Maximum sampling error (95% confidence interval): +/-1.0%
Results were post-weighted by age, gender, super fund type and super balance to ensure correct distribution of Australian adult population
Analysis of subgroups will have a higher sampling error
9Copyright 2016 Investment Trends Pty Ltd. Feb 2016 How investor attitudes and product needs are evolving – Handouts. Confidential. Webinar attendee use only.
Number of Australian adults who intend to turn to a financial planner for (additional) financial advice in the next two y earsNote: This includes existing planner clients who wo uld like
to receive additional advice from their financial p lanner
1,500,0001,900,000
2,500,000
2013 [n=1479] 2014 [n=1819] 2015 [n=2224]
There was a 32% increase in the number of people intending to turnto a financial planner for (more) advice in the next 2 years
+27%
+32%
Note: Not all will do so
Based on Investment Trends modelling.
1.2m from a new planner relationship
1.3m as additional advice from their planner
Source: August 2015 Financial Advice Report
10Copyright 2016 Investment Trends Pty Ltd. Feb 2016 How investor attitudes and product needs are evolving – Handouts. Confidential. Webinar attendee use only.
Q52 How did you find [ your financial planner ]? (Multiple responses permitted) Among those who have used a financial planner in th e last 12 months
29%
18%
9%
8%
8%
6%
3%
3%
3%
3%
2%
16%
10%
0% 10% 20% 30% 40% 50%
Asked friends/relatives for recomm.
Asked my bank
Asked an accountant
Asked my super fund
Asked a financial planner
Web / Google search
Print (newspaper/magazine) ads
Asked a product provider for recomm.
Looked for / asked member of a prof. industry assoc.
Television advertisement
I heard about it on the radio
Checked ASIC website
Yellow pages search
Through social media
Other
I'm not sure
2014 [n=247] 2015 [n=322]
Referrals matter: 66% of those using a planner found them via a referral, particularly (independent) third parties.
More are also turning to digital sources compared to last year
66% found their financial planner through referrals
Source: August 2015 Financial Advice Report
11Copyright 2016 Investment Trends Pty Ltd. Feb 2016 How investor attitudes and product needs are evolving – Handouts. Confidential. Webinar attendee use only.
Q53 What were the top three things you were looking for when selecting [ your financial planner ]? (Multiple responses permitted) Among those who
have used a financial planner in the last 12 months [n=321]
34%
32%
31%
28%
16%
12%
12%
11%
9%
6%
5%
3%
3%
3%
46%
14%
0% 10% 20% 30% 40% 50%
Ability to explain concepts in a way I can understand
Honesty/integrity
Experience
Detailed knowledge of inv products
Available/accessible when I need them
Low fees/cost
Good communication skills
Close proximity (location)
Good client testimonials
Good investment returns
Impartiality/independence
Work for a company I know/trust
Member of a professional industry association
Direct shares advice/expertise
Qualifications/education and training
Tax expertise
Access to particular investments out of reach
Other
Quality of communications matter for driving client acquisition
Communications: 54% after
removing overlaps
Source: August 2015 Financial Advice Report
12Copyright 2016 Investment Trends Pty Ltd. Feb 2016 How investor attitudes and product needs are evolving – Handouts. Confidential. Webinar attendee use only.
Thank you!
13Copyright 2016 Investment Trends Pty Ltd. Feb 2016 How investor attitudes and product needs are evolving – Handouts. Confidential. Webinar attendee use only.
© Copyright 2016 Investment Trends Pty Limited. All rights reserved.
The material in this Report (“February 2016 How investor attitudes and product ne eds are evolving – Handouts ”) contains proprietary information including copyright material and trademarks, the rights to which must be respected. Investment Trends owns the copyright in the design, selection, arrangement, production, and presentation of the Report, as well as in the material originally developed by or for Investment Trends. You may use copyright material for your personal or internal use within your business. Otherwise, and except as permitted by law, no copying, publication, modification or commercial exploitation of the Report is permitted without the prior written permission of the owner.
Except for any rights under any legislation in Australia or any other relevant jurisdiction which cannot be excluded or limited, Investment Trends does not provide a warranty with the Report or give an assurance as to its accuracy or reliability. Investment Trends shall not be liable for any damages you suffer, or which are claimed against you by a third party, arising out of use of the Report. You should particularly note that most of the issues covered in our Report(s) are in a continuous state of change and are likely to be appropriate only for the timeframe indicated. As such you must make your own enquiries regarding any aspect of the Report or research that you may seek to rely on and not rely solely on the Report for any purpose. You should also note that we rely on information provided to us through various research and data collection methods and whilst we have made our best endeavours to ensure reasonableness and accuracy, we have not audited the information and do not audit claims.
Analysis: Mark Johnston, Principal
Borhan Uddin, Director of Statistical Research
Recep III Peker, Head of Research, Wealth Management
King Loong Choi, Senior Analyst
Audience: Australian Investors
Data collected: 2015
Collection method: Online surveys
14Copyright 2016 Investment Trends Pty Ltd. Feb 2016 How investor attitudes and product needs are evolving – Handouts. Confidential. Webinar attendee use only.
About Investment Trends
Investment Trends is a specialist research organisation which provides new business insights and decision support information to most leading Australian financial services organisations. We combine analytical rigour and strategic thinking with the most advanced market research and statistical techniques to help our clients gain competitive advantage.
Investment Trends is headed by Mark Johnston. Mark has been a leading industry analyst in the brokerage, wealth management and financial planning industry since 1999, and has been widely quoted in the Australian media.
Our clients include the industry regulators, peak industry bodies, all of the top 6 Australian banks, top 10 investment platform providers, top 6 online brokers, as well as most leading fund managers and industry super funds, margin lenders, dealer groups and financial planning software providers.
Our work is focused on helping clients answer three fundamental questions:
1. How does the market currently work?
2. How is the market evolving?
3. How do I improve business outcomes:
•Acquire more customers
•Retain more existing customers
•Increase revenue per customer
•Prioritise technology and process investments
15Copyright 2016 Investment Trends Pty Ltd. Feb 2016 How investor attitudes and product needs are evolving – Handouts. Confidential. Webinar attendee use only.
Investment Trends Pty Limited
ABN: 14 107 485 656
ACN: 107 485 656
Suite 2102, Gold Fields House
1 Alfred Street
Sydney NSW 2000Australia
Phone: +61 2 8248 8000
Fax: +61 2 8248 8080
E: sales@investmenttrends.com.au
www.investmenttrends.com.au
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