To mark World Investor Week (2 – 8 October 2017), ASIC is reminding investors to work out their financial goals and develop an investment plan before committing to an investment.
‘Smart investors don’t rely on good luck; they plan, research and understand their investments and how they fit with their financial goals’, said Peter Kell, ASIC’s Deputy Chairman.
ASIC’s MoneySmart website offers the following practical tips for investors:
- Review your investment needs and goals to develop the right investment plan for you;
- Understand how risky the investment is and decide how much risk you want to take on;
- Use ASIC’s Professional Registers to check if the company or investment scheme is licensed by ASIC;
- Find out how the investment product or company works and how your money will be invested;
- Read the product disclosure statement for each investment product to understand the product’s features, fees, commissions, benefits and risks;
- Use diversification to spread your risk between different asset classes;
- Watch out for get rich quick schemes, know the signs of an investment scam and check ASIC’s MoneySmart tips on avoiding scams.
ASIC’s MoneySmart Investor Toolkit is part of a suite of free tools and resources developed for retail investors to explain different investment products and concepts, including risk and return and diversification. The toolkit asks people questions to build their investing profile and create a personalised reference list to help them explore the tools and resources available on ASIC’s MoneySmart website.
Mr Kell said ‘With only 39% of Australians reporting that they understand the investing principle of ‘diversification’[1] it’s important that people are clear about why they’re investing and only invest in products they understand’.
Background
ASIC is the Australian Government agency responsible for financial literacy, consistent with its strategic priority to promote confidence and trust in the financial system. ASIC works to improve the financial capability of Australians so they can develop the attitudes and behaviours to make good financial decisions.
ASIC leads and coordinates the National Financial Literacy Strategy, which sets out a national framework for financial literacy work in Australia. The Strategy highlights the importance of people having access to tailored resources and tools, and addressing the financial issues facing vulnerable sectors of the community. People experiencing high financial stress and crisis are identified as one of a number of priority audiences in the National Strategy.
ASIC’s MoneySmart website provides trusted and impartial financial guidance and tools to help Australians of all ages manage their money and make informed financial decisions.
World Investor Week, an initiative of The International Organization of Securities Commissions (IOSCO), is a global campaign to raise awareness about the importance of investor education and protection. It highlights the investor education and protection initiatives of securities regulators on six continents.
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[1] Australian Financial Attitudes and Behaviour Tracker, Wave 5, March 2017. http://www.financialliteracy.gov.au/research-and-evaluation/financial-attitudes-and-behaviour-tracker