Independents lose out as confidence remains stalled

A majority of Australians continue to rely on their own judgment when it comes to financial matters and those who make use of professional advice are increasingly unlikely to be getting it from a non-aligned financial planner.

A Core Data Investor Sentiment Research Report for the first quarter of 2012 found investor confidence slightly up but still negative for the eighth consecutive quarter.

Four in 10 respondents (42.1 per cent) feel financially insecure, up slightly from 41.0 per cent in the last quarter.

Respondents with a financial adviser and those with a superannuation fund are still more likely to be feeling secure than those without an adviser or super fund.

However, those with a financial adviser are more likely to withdraw money from an existing investment (33.3 per cent compared with 27.6 per cent) this quarter.

Investors primary source of advice remains their own judgment (51.6 per cent), ahead of friends/family (10.2 per cent) and accountants (9.9 per cent).

Non-aligned financial planners dropped significantly from 12.2 per cent to 8.5 per cent while financial planners aligned with an institution went from 7.6 per cent to 8.3 per cent.

Bankers and brokers also increased as a source of advice quarter on quarter (3.2 per cent from 1.8 per cent, and 2.5 per cent from 0.1 per cent respectively).

Turning to broader themes, the research found a significant number of investors (58.6 per cent) maintain a negative outlook for the growth prospects of the economy, though this has decreased slightly from Q4 of 2011 (65.0 per cent).

The proportion of Australians who expect business conditions to worsen in the next quarter slightly rose from 50.4 per cent in Q4 to 53.6 per cent in Q1 2012. However Australians are less pessimistic about business prospects than in Q3 when 68.1 per cent felt this way.

The negative sentiment towards both economic and business conditions are shared by all demographics, however Western Australia stands out because of their relative levels of optimism.

Following last quarter’s trend, one in four investors (25.3 per cent) see cash investments getting better, whereas almost the same proportion (25.9 per cent) believe it to be worse.

Despite this, cash still remains the most popular asset class for investors to rebalance to, with one in four (25.8 per cent) investors looking to rebalance to cash this quarter.

A total of 1,004 respondents participated in the survey, which was carried out between 21 February and 5 March this year.