SMSF not ‘purely for wealthy investors’, says GSAM

Research from Goldman Sachs Asset Management (GSAM) has shown 40 per cent of respondents with an SMSF reported a total household income of less than $100,000.

GSAM’s latest Retail Investor Survey, conducted in November 2014, also found use of SMSFs increased significantly with age, with less than 10 per cent of 18 to 43-year-olds, 19 per cent of 45 to 54-year-olds, 36 per cent of 55 to 64-year-olds and 39 per cent of those over 65 using an SMSF.

In addition, the research found 51 per cent of investors who have SMSFs use the services of a financial adviser.

“Investors with financial advisers were more likely to have diversified portfolios, were satisfied with the advice they received and would recommend their adviser to friends or family,” Golman Sachs stated.

Also, 91 per cent of respondents who had a financial adviser were either ‘very satisfied’ or ‘satisfied’, with women more likely to be ‘very satisfied’ than men.

A further 66 per cent of people who had a financial adviser said that their financial adviser had the biggest influence on their investments decisions, compared with 65 per cent of investors who did not have a financial adviser who relied on their own experience, views and knowledge.

Broadly, Golman Sachs found retail investors have low confidence in Australia’s economic outlook and low appetite for investment risk.

“The survey revealed a clear and concerning disconnect between confidence in the domestic economy, which was low, and confidence in the outlook for domestic equities, which was high,” said Jessica Jones, managing director and head of third party distribution at GSAM for Asia Pacific (excluding Japan.)

“Retail investors appear to be ignoring some important macro themes as they set investment intentions, and in our view the data points to an ongoing lack of meaningful diversification in investment portfolios.”

“Of particular concern was the fact that those aged over 65, who should be focused on reducing investments in high-volatility assets, were in fact the most likely to have an allocation to domestic equities.

“Further, more than 36 per cent of this age group intended to invest more capital in this asset class in the next 12 months. At the same time, less than a quarter of this age group (17 per cent) had direct fixed interest allocations, an asset class which provides important diversification benefits.”

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