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Retail investor numbers hit new highs

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The number of active retail online investors in Australia grew substantially during 2020, the latest research from Investment Trends has found.

The population of Australian retail online investors has reached a new high, with almost half a million first-time investors during 2020, the latest analysis from research firm Investment Trends has revealed.

According to the “2020 2H Australia Online Investing Report”, the number of active retail online investors in Australia grew to 1.25 million by the end of last year, with as many as 425,000 Australians making their first share trade during the year.

Investment Trends head of research Irene Guiamatsia said: “Young Australians are increasingly embracing investing, with one in six first-time investors under the age of 25.

“COVID-induced market volatility and a low interest rate environment were important prompts for first-time investors entering the market, but even more prominent was the desire to learn a new skill, highlighting how many Australians chose to spend their free time during the lockdowns.”

The report found the dramatic increase in investor numbers was heavily influenced by a greater interest in international stocks, with the number of Australian active international share traders growing from 54,000 to 109,000 during 2020.

“The spectacular recovery witnessed by US stocks in the second half of 2020 has captured the attention of a global audience, prompting many Australians to consider investing beyond local equities. A greater choice of investment platforms has been a key driver for uptake, with recent new entrants giving investors more choice than ever,” Guiamatsia noted.

Investors were also increasingly looking to their investment platforms for support in the form of education about strategies and daily newsletters, the report found.

“Our research highlights that investors are hungry for knowledge, resources and tools to help them build long-term wealth. Investment platforms that effectively support their clients on their investment journey will stand out,” Guiamatsia added.

In September, Investment Trends’ “2020 Financial Advice Report” found the level of interest from consumers for financial advice had doubled over the past five years, driven in part by the COVID-19 pandemic, which had resulted in around 75 per cent of current advice clients engaging with their adviser about its impact.

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