Experienced investors looking for advice amid ‘unsettling conditions’

Australians who consider themselves highly knowledgeable about investment markets are now more likely to speak to an adviser as inflation and interest rates continue to rise.

According to the Schroders Global Investor Study 2022, 36 per cent of Aussies with advanced or expert-level knowledge are more interested in consulting with an adviser, along with 21 per cent of those with intermediate knowledge and 40 per cent with beginner-level knowledge.

Regarding their investment strategies during the current inflationary environment, 60 per cent of Aussies were found to have made changes and a further 28 per cent have not yet made changes but intend to do so in the future.

There has also been a shift in attitude towards risk, with 58 per cent of respondents feeling that they are forced to take on more risk than they want to meet their return expectations, and 62 per cent sometimes make investment decisions under pressure that they turn out to regret.

Schroders Australia deputy head of fixed income Kellie Wood said that one concerning finding of the research is that 59 per cent of the Australian respondents have sacrificed long-term investment strategies for short-term gains and financial returns.

“The good news is that over the past six months, Australian investors are increasingly looking to professional investors and advisers for assistance with their investment portfolios,” she said.

“Ultimately, these unsettled conditions have emphasised the need for Australians to seek expert guidance when it comes to their investments, and this will lead to better investment outcomes for investors.”

Australian investor return expectations over the next five years currently sit at an average of 10.41 per cent, only slightly down from 10.56 per cent last year.

Government bonds, digital assets and cash or cash equivalents have become less attractive, while market-linked investments have increased in popularity during the past six months.

Schroders Australia CEO Sam Hallinan also highlighted the link between mental health and financial health observed in the firm’s research; 64 per cent of Australians indicated that the performance of their investments has a direct impact on their mental wellbeing.

“Given that more Australians believe that investment performance is linked to mental wellbeing compared to the global average, the stakes are high. This, more than anything else, highlights the importance of professional financial advice for financial and mental wellbeing,” he said.

“Fortunately, there is help out there for these anxious investors, with even those who consider themselves knowledgeable investors turning to financial advisers to help them navigate the uncertainty.”

Jon Bragg

Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.