According to the Goldman Sachs Asset Management (GSAM) 2013 Australian Retail Investor Survey – which surveyed 600 retail investors in October 2013 – retail investors are maintaining a high exposure to Australian equities despite indicating risk appetite preferences that may be geared towards other asset classes.
“There is a significant disconnect between risk appetites and asset allocation strategies,” said a GSAM statement reflecting on the survey findings. “While continuing to profess an aversion to risk, investors are increasing allocations to riskier asset classes such as equities, while only 13 per cent of investors state they hold diversified portfolios.”
The survey found that 48 per cent of investment portfolios held by respondents comprise “mainly of Australian equities”, with “almost a third” planning to increase exposure to equities “over the next year”.
Substantial exposure to Australian equities notwithstanding, the survey also found investors are keen to “learn more about asset classes” beyond equities, including fixed income and emerging markets.
However, despite the apparent thirst for knowledge from investors, the survey revealed that while 41 per cent of respondents engage professional financial advice services, only 10 per cent rely on that advice when making investment decisions – down from 17 per cent in 2012.
While describing this statistic as “alarmingly low”, GSAM managing director and head of third party distribution Asia-Pacific (ex. Japan) Jessica Jones said the numbers do not mean the “end is nigh” for financial advisers.
“There is a real need and opportunity for advisers to engage with retail investors to help them better understand risk and diversification,” Ms Jones said.
The survey also found that investors are more confident about the Australian economy than in 2012, with 45 per cent of investors “confident”, up from 31 per cent in 2012.
