Advice

Investors turn to the web for advice

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An interesting statistic which I have picked up (Andrew Inwood – The Australian – 24/06/2014) is that some 67.4 per cent of High Net Worth Individuals (HNWI’s) now turn first to the internet for information about investing, service provider quality and economic data. They are now shunning newspapers, lawyers, accountants and financial planners.

This does not come as a surprise when consideration is given to recent events such as

  • The wind back of Future Of Financial Advice (FOFA) to remove the “best interests of Investors” coverall;
  • Senate inquiries which will inevitably lead to another royal commission;
  • Cut backs to funding of the ASIC; and
  • Some 80% of financial planners being owned by six institutions.

Clearly HNWI’s have lost confidence in traditional sources of financial advice.

What impact does this have on Investors?

This has been great for business at GPS. We severed ties with Financial Planners back in about 1997 when we got the “best interests of Investors” coverall and transparency requirements which effectively ended the payment of commissions.

The increasingly common conversation we are having with new Investors goes along the lines of “I have some moneys coming off term deposit. I have enough in shares and property. I have been reading / heard about you guys and want to know more as an 8.25% p.a. interest rate for a first ranking security investment sounds quite good.”

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