As part of the 2013 Direct Investing Report, CoreData conducted an online survey of 1,139 investors between 31 July and 14 August.
The investors were divided along psychological lines, with ‘coach seekers’ placing an emphasis on income generation and ‘controllers’ prioritising control of their investments as well as capital growth.
CoreData head of advice, wealth and super Salvador Saiz said direct investing is “one of the most critical developments in recent decades”.
The trend toward direct investing is also changing the behaviours, needs and asset allocations of investors, he said.
According to the CoreData research, the top three drivers of future increases in direct investment are lower trading fees, the development of online ‘do-it-yourself’ systems and better investor understanding of opportunities and risks.
“Direct investing in the market is growing at a steady pace and is being fed by a burgeoning segment of the market with improving financial literacy and desire to take control of their financial independence,” said Mr Saiz.
The barriers to growth for direct investing are a lack of time, a lack of confidence and a difficulty in making risk investments, according to the research.
CoreData found there is still a healthy demand for advice among people who are attracted to direct investments, with a majority of direct investors citing cheaper fees as a motivator to seek out advice.
Scaled advice can be a ‘conversation starter’ for a full service relationship, according to the research.
If they are satisfied with the scaled advice they receive, 75 per cent of respondents said they were likely to expand into full advice.
CoreData also found that the direct investment options offered by some superannuation funds is likely to ‘satiate’ peoples’ desire for direct investing.
