The bi-annual Lifeplan ICFS Financial Advice Satisfaction index has revealed that while wealthier investors aged over 60 are worried about the future of their investments, new investors are engaging more with financial advisers and benefitting from the recent positive results from the capital markets.
Australian Unity undertakes the ICFS Financial Advice Satisfaction index survey every six months with the University of Adelaide. It measures investors’ attitudes to financial advisers including perceptions of trust and reliability, technical ability, and investment performance.
Matt Walsh, general manager of life and super at Australian Unity Wealth, said that these findings foreshadowed the need for advisers to remain vigilant in communicating with investors with varying needs and expectations while ensuring their different concerns are addressed.
“The financial advice industry needs to consider how to reassure older investors and how their portfolios may need to be adjusted, to ensure these investors are prepared for future market conditions,” Mr Walsh said.
“Newer investors, meanwhile, who have recently started taking investment advice, have positive perceptions regarding their investments a result that we believe in part reflects the advantage of taking professional financial advice, and in part the recent positive results from the capital markets.
“Domestic and international markets have performed well over the past six months since the April 2016 survey, with a rebound in resources helping the domestic investors.
“However, the downside risk of equity and bond markets is now higher as they brace for headwinds due to planned interest rate increase by the US Federal Reserve and the uncertainty arising from the US election result,” Mr Walsh said.
The index showed a year-on-year increase of 0.83 percent—rising to 73.2 over the October 2015 index levels, however it did record a slight decrease (0.27 percent) when compared to the April 2016 index levels.
Two of the three drivers of satisfaction increased since the previous survey—performance and trust and reliability—while perception of technical abilities decreased.
“In contrast to baby-boomers, middle-age investors are more likely to take risks and have longer investment horizons. This group has been positively impacted by recent capital markets movements and has shown an increase in its perceptions across the three drivers,” Mr Walsh said.
As with previous survey results, perceptions between the genders varied significantly.
“Perception of trust and reliability, technical abilities and performance between the genders remained statistically higher for female investors, though it was only the perception of performance that increased for the female investors,” Mr Walsh said.
“While age and duration of advice were not a differentiating factor between the genders, the female investors did perceive their advisers to have higher levels of financial literacy.
“Also as with previous survey results, the perceptions of the three drivers are positively related with duration of advice.
“This survey shows that as the duration of advice with current adviser increases, the perception of technical abilities also increase, though there is no change in the perceptions of performance.”
The October 2016 survey was conducted in the first week of October of 410 respondents.
Lifeplan is a specialist business of Australian Unity Investments. It is a market leader in investment bonds and funeral bonds, and a leading provider of education investment funds.
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