Advisers' confidence in the Australian share market to deliver high returns in 2014 has dwindled compared to the same time last year and many are considering growth opportunities in international markets, according to a recent Investment Trends survey.
The company's September 2014 Adviser Product Needs and Marketing Needs Report, released to Investment Trends clients in November 2014, reveals changes in how advisers perceive Australian shares, multi-region international exposure, and the quality of fund manager information.
Based on a survey of 768 financial advisers, the report suggests that Australian investors' faith in Australian shares will decline over the next 12 months. The majority of respondents believed the share market would only grow by 3% during this period, compared with 7% at the end of 2013.
However, this does not reflect a wider disinterest in growth assets. In fact, the report shows that advisers on average invested just 15% of new client flows into cash products in 2014, less than half the amount invested in 2012 (31%).
At the same time, client demand for international exposure is increasing - 33% of new client investments went into international assets in 2014, up from 26% in 2012. The report suggests much of this exposure will be in multi-region funds (rather than US-specific ones), with 70% of respondents planning to invest in these over the next 12 months. This reflects Investment Trends senior analyst Recep Peker's comment that the US is no longer a "hot destination", due to rising sentiment that the Dow Jones has peaked (or is nearing a peak).
Finally, the report illustrates the growing adviser demand for information from fund managers. Australians' interest in financial advice is increasing across the board, and 74% of respondents are hoping to capitalise on this by receiving more information and educational tools from fund managers - which they can then translate into persuasive (and relatable) stories for clients.