The inherent conservatism of Australian investors is causing them to miss global opportunities, says Legg Mason.
In the 2015 Global Investments Survey, Legg Mason found that 77 per cent of Australians regard themselves as conservative investors, with only 29 per cent willing to increase their risk tolerance to generate further income.
Legg Mason global head of distribution marketing Matt Schiffman said: “Australians as an investor group are less willing to consider risk as an option to grow their wealth.”
The survey – which looked at the attitude of 4,200 affluent investors (200 Australians) in 20 markets – also found that Australian investors are less interested in international asset allocation.
Only 36 per cent of Australian investors agree with increasing international investments – compared with 67 per cent of investors in other countries.
“Australians are much more comfortable investing at home than abroad, and they continue to be particularly attracted to property, perhaps because of the associated tax efficiencies and recent price growth in key markets.
“However, their bias towards one particular asset class could mean they are missing out on key sources of capital growth and income,” Mr Schiffman said.
Australians have a bias toward property, allocating an average of 27 per cent compared to the global average of 16 per cent, the survey found.
"In every category of confidence – managing investments, achieving financial goals, retiring at the age they want, having enough income to preserve a lifestyle, manage financial investments – Australian investors scored much lower than their global counterparts.
“Seeking professional advice could perhaps change that dynamic," Mr Schiffman said.
Legg Mason-aligned Martin Currie chief investment officer, Reece Birtles, said it is an “education issue”.
The survey also found that 71 per cent of Australians invest to ensure a comfortable retirement.
According to Legg Mason, this indicates a “shift in priorities” from capital growth to income generation.
“With a growing number of local investors either in or reaching retirement, focus has shifted towards protecting their assets in years to come, and avoiding big drawdowns in the event of a market decline,” Mr Schiffman said.
Wealth management relationships are under threat as clients look to switch providers driven by the impact of the royal commission. ...
S&P Dow Jones has announced a new addition to its global ESG index using enhanced ESG scores and granular data. ...
Investor confidence is on the rebound and the ASX hit a 12-year high on Monday. But it’s not all good news for the Australian economy. ...