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Financial Planning, Investments, Portfolio Construction

Advised investors more buoyant about markets

Australian investors who have a professional financial adviser are considerably more confident about the outlook for investment markets compared to those who do not seek advice, according to a new survey.

Legg Mason’s “Global Investment Survey 2018 ” showed nearly three-quarters or 71 per cent of advised investors felt confident about investment opportunities in the coming 12 months.

This compared to only 55 per cent of do-it-yourself (DIY) or self-directed investors.

Legg Mason Australia managing director Andy Sowerby told a media briefing in Sydney today that the study indicated the distinction between advised and non-advised investors is an important one in terms of confidence levels.

“When we looked at advised and non-advised, we looked at fully advised, partly advised, advice for all of my decisions, advice for most of my decisions and DIY,” Sowerby noted.

In terms of equity market expectations, the survey found over 50 per cent of investors expect local and global share markets to continue to perform well in the year ahead.

But DIY investors were far less confident about investment opportunities in the next 12 months compared to advised investors.

“One of the things that comes out of the survey is people do understand the value of diversification. They do recognise the value of broadening out their investment opportunities in different asset classes,” Sowerby said.

However, he pointed out DIY investors tend to be more heavily skewed towards equities compared to advised investors whose portfolios are more balanced.

The report, which was based on a survey of 16,810 investors globally and 1000 Australian investors, found local investors still hold high levels of cash, comprising around 27.4 per cent of the average portfolio.

This is even higher for DIY investors, whose average cash holdings amounted to 34.3 per cent of their portfolios compared to 25.3 per cent by their advised peers.

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