Professional financial advice outpacing self-directed

An overwhelming number of retail investors are turning to financial advice rather than single-handedly making investment decisions on their own.

About half (45%) of 4000 investors are using financial planners purely to help manage financial risks, while a larger portion (60%) are increasingly using professional advice in the form of a financial planner, broker, accountant and lawyer.

The numbers come from an annual joint study by Deloitte Access Economics and the ASX. It showed respondents are seeking advice because it can be tailored to their personal circumstances; diversify portfolios and minimise risk; navigate through administrative and tax burdens, as well as access investments they would otherwise not have access to.

'Do-it-yourself' investors on the other hand are convinced there is no value in financial advice and as many as 48% rely on internet searches for information.

Deloitte Access Economics partner John O'Mahony said a common conclusion that emerged from this year's research is the importance of investors seeking more advice.

"But our study shows that financial advisers need to be offering the right products and services to suit the market. For example, increasing economic and political uncertainty at home and around the world is making risk management and portfolio diversification an increasingly important consideration," he said.

When it comes to robo-advice, a common theme among the different generations is that a majority said they would not use it or don't know enough about robo-advice to even consider using it.

Among the other findings, the proportion of 18 to 24-year-olds investing doubled from 10% to 20% in the past five years, while the proportion of 25 to 34-year-olds increased from 24% to 39%.

Despite popular belief, young investors have a lower tolerance for risk, with four in five preferring guaranteed or stable investment returns, the report said.

Most retirees (60%) said they want guaranteed or stable returns at an 8% average; 41% of those aged over 55 are comfortable with some variability in returns.

Read more: Deloitte Access EconomicsASXJohn O'Mahony
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