Where do different generations invest their money?

An Australian study could reveal some surprises when it comes to the investment preferences of both young and old.

If you thought cash savings or investment property were the most popular retail investment choices among Aussies, a recent study by the Australian Securities Exchange (ASX) revealed that it was in fact shares, along with other on-exchange investments*1.

The 2017 report, prepared by Deloitte and based on a survey of 4,000 people, made some interesting discoveries, with the number of young investors doubling over five years and more people under the age of 35 opting for stable returns in comparison to their older counterparts2.

What the findings uncovered

Some key statistics from the report revealed3:

  • 60% of Aussie adults hold investments outside of their institutional super fund
  • 62% of investors hold on-exchange investments, 56% hold cash, and 37% hold property
  • The number of investors aged 18 to 24 doubled from 10% to 20% over five years
  • The number of investors aged 25 to 34 increased from 24% to 39% over the same period
  • 81% of investors under age 35 are seeking guaranteed or stable investment returns
  • 41% of investors over age 55 are comfortable with some variability in their returns
  • 60% of all investors access professional advice to help them make investment decisions
  • 15% of adults have a self-managed super fund, with 30% planning to set one up.

How do different age groups compare?

Next generation investors (age 18 to 24)4

  • Top three goals: Accumulating wealth, saving for a home deposit, saving for travel
  • Risk appetite: 81% want guaranteed or stable returns from their investments
  • Return expectations: around 8.2%
  • Investment mix: 44% cash, 31% shares, 25% investment property, 22% other on-exchange investments
  • Access financial advice: 37%.

Wealth accumulators (age 25 to 59)5

  • Top three goals: planning for retirement, accumulating wealth, supplementing current or future income
  • Risk appetite: 67% want guaranteed or stable returns from their investments
  • Return expectations: around 9.2%
  • Investment mix: 53% cash, 51% shares, 42% investment property, 25% other on-exchange investments
  • Access financial advice: 44%.

Retirees (age 60 and over)6

  • Top three goals: planning for retirement, supplementing current or future income, accumulating wealth
  • Risk appetite: 60% want guaranteed or stable returns from their investments
  • Return expectations: around 8%
  • Investment mix: 68% cash, 58% shares, 26% investment property, 18% other on-exchange investments
  • Access financial advice: 52%.

Who isn’t investing and why?

The majority of non-investors (54%) indicated that a lack of money was the reason behind why they did not invest, with the second biggest reason being they lacked confidence in their ability to do it7.

The report indicated however, that many non-investors were younger people who did not yet have the level of income to invest, adding that non-investors also had different financial goals when compared to those who invested8.

“While investors are focused on the long term (saving for retirement, wealth accumulation, supplementing income), non-investors are interested in the shorter term,” the report said, pointing to their goals including things such as travel, paying off debt and saving for a rainy day9.

Other reasons people didn't invest included perceived costs, needing advice but not knowing how to find it or what they’d be charged, concerns around volatility, and a lack of interest and time10.

Where to go for assistance

If you want assistance or information about investing, speak to your adviser. Alternatively, you can contact AMP on 131 267 or use our find an adviser tool to locate a professional in your area.

You may also want to read other investment-related articles on AMP News&insights or check out our free online investment education modules for ideas.

 

* On-exchange investments refer to listed investments and other financial products available on a financial exchange and held through unlisted managed funds, such as shares, derivatives, and other products such as bonds and exchange traded funds.

1 - 10 ASX Australian Investor Study 2017 pages 1, 2, 20, 40, 41, 42, 43

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© AMP Life Limited. This provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, AMP does not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, AMP does not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.