Schroders CEO Chris Durack

Australians expect less income on their investments and have a more realistic outlook than comparable investors around the world according to data out of the Schroders Global Investor Survey.

Conducted with responses from 23,450 people across the globe – including 1000 Australians – between April and June this year, the Schroders report states that the average minimum level of income Australians would like to receive on their investments is 7.8 per cent per annum, and what they realistically expect is 7.1 per cent.

This compares to the global cohort, which would like 9 per cent as a minimum and realistically expects to reap 8.8 per cent over the next twelve months.

“One of the immediate observations is that Australians are a bit more moderate in their income expectations compared to global counterparts,” said Schroders chief executive Chris Durack during a webinar presentation.

The survey also revealed that Australians had milder expectations before the pandemic; 72 per cent of local respondents said they had low expectations before the pandemic hit, indicating that the dampened expectations are about more than the effects of Covid 19.

Durack said it was an “interesting outcome”. Despite the slightly more conservative view Australians have, the CEO says it’s probably still optimistic.

“We would argue… that these are still quite high,” Durack said. “The message here is that we’re still of the view that they’re high expectations and perhaps we’re at risk of some disappointment.”

Over the next five years Australian investors expect to make an average annual total return – with both income and capital growth – of 8.9 per cent, which is less than the global average of 10.9 per cent.

Regionally, Europe’s expectations over the next five years were the lowest at 9.3 per cent, while the Americas topped the list at 13.1 per cent. The country with the lowest expectations was Japan at 5.9 per cent.

On advice, the survey found that 47 per cent of Australians surveyed who were receiving advice “usually” received that advice from an independent financial adviser, compared to 42 per cent globally. In a reflection of the institutional exodus from advice, only 30 per cent of the Australians under advice indicated they usually receive that advice from a bank, compared to 46 per cent globally.

Tahn Sharpe is a Sydney-based financial services journalist with a background in financial planning. He writes on advice, superannuation, investment, banking and insurance issues, is a certified SMSF Adviser and holds an Advanced Diploma of Financial Planning. Contact at [email protected]
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