Many Australian investors are limiting their investment potential by relying on do-it-yourself investment strategies, and newspapers for sharemarket advice.
Many Australian investors are limiting their investment potential by relying on do-it-yourself investment strategies, and newspapers for sharemarket advice.
A recent share ownership study showed only 19% of investors said a financial adviser was their main information source and brokers ranked even lower with 14%. Instead, 22% are turning to newspapers for advice and informationš.
According to Grant Salmon, chief operating officer of Aviva Australia, the key to optimising investment income was top advice and the decision to "go it alone" could end up costing investors thousands of dollars.
"Financial advisers and institutions are frustrated with the amount of people still relying on ‘talk around the water cooler’ and newspapers to make major investment decisions," comments Grant.
Lack of diversity tends to be the biggest problem for people looking to invest directly in the sharemarket – especially those with lower balances. Currently 51% of investors have at least four companies in their portfolio˛.
"This figure seems quite positive, however experts generally look at between eight and 12 companies. Australian investors on the sharemarket are often missing out on premium investment gains because they don’t have the scale of funds necessary to make a reasonable profit," said Grant.
This issue has led some investors to look at managed funds which invest in shares – a product designed at giving investors access to shares in a high number of companies through one administration/investment process.
"Most managed funds investing in shares give investors access to between 30 and 150 companies – this provides enormous opportunity to diversify investments, even for investors with modest amounts to invest," said Grant.
"Before even considering the sharemarket, you should go to see a financial adviser to ensure this is the best investment strategy to suit you. An adviser will take all your financial needs and the most tax and social security effective strategies into consideration when structuring a financial plan – for you and your future."
-ends-
š Australian Stock Exchange, ASX Share Ownership Study 2003, February 2004, Melbourne.
˛ Australian Stock Exchange, ASX Share Ownership Study 2003, February 2004, Melbourne.
For further information, please contact:
Simon Morgan, Group General Manager Public Affairs
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0407 966 632
Notes to editors:
- Aviva Australia is a group of two specialist financial services companies: Navigator and Norwich Union Life Australia Ltd. Portfolio Partners, the Australian funds management arm of Aviva plc, is a sister company. Through these companies we provide products and services in the areas of wealth creation, wealth management and wealth protection for more than 300,000 customers throughout Australia
- Globally, Aviva Australia is part of Aviva plc, the world’s seventh largest insurance group, the largest insurer in the UK and one of the top five life companies in Europe. Aviva was formed in May 2000 through the global merger of CGU plc and Norwich Union plc
- Aviva is a leading provider of life and pensions products to Europe and has substantial businesses elsewhere around the world. Its main activities are long-term savings, fund management and general insurance. It has premium income and investment sales from continuing operations of A$66.08 billion, and more than A$472 billion of assets under management (as at 1 January 2004). The group has more than 56,000 employees and 30 million customers worldwide
- The information in this document reflects Navigator Australia Limited's ('Navigator’) understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way. The information given in this document is of a general nature and has not taken into account the investment objectives, financial situation or particular needs of any particular person and it is not a substitute for professional advice. Applications to invest in a financial product issued by Navigator, or any of its related entities, must be made by completing the application form attached to the applicable Product Disclosure Statement ("PDS"). A PDS is available from Navigator or your financial adviser. Before making an investment decision on the basis of the information above, a prospective investor needs to consider, with or without the assistance of a professional adviser whether the information is appropriate in the light of their particular investment needs, objectives and financial circumstances.