Digital engagement channels show continued growth: Online Broking Report

Specialist researcher Investment Trends has released its 2018 2H Online Broking Report, an in-depth study of the attitudes and behaviours of online equities and ETF investors in Australia.

Trends highlighted in the report:

• More Australians are investing despite choppy market conditions.
• Digital engagement channels continue to grow in importance.
• Investors embrace advancements in consumer technology.

More Australians are investing despite choppy market conditions

Investment Trends surveyed over 8,000 Australian online investors in Q4 2018, examining their trading experience through this particularly volatile period. The research reveals that rather than being deterred by the fourth quarter’s challenging market conditions, many investors chose to continue trading, while many dormant investors were prompted to recommence their trading activity. This has led to a significant rise in the population of online investors in the six months to Dec 2018 – from 720,000 to 750,000.

“Many online investors took the broad sell-off in equities at the end of 2018 as a buying opportunity. Existing investors stayed invested or made additional investments, and 76,000 resuming their investing activity in the last six months,” said Recep Peker, Research Director at Investment Trends.

“In the current market and geopolitical climate, investors’ needs from the online brokers and product providers they use are increasingly concentrated around decision support tools,” added Peker. “There is widespread appetite for stock recommendations, trading ideas, in-depth research and analyst reports as investors seek tools that give them the edge to make informed decisions in these uncertain times.”

Digital engagement channels continue to grow in importance

In line with their growing need for better decision support tools, online investors are increasingly relying on digital engagement channels as part of their investing. Nationwide, 24% of online investors currently use social media platforms for investing or finance-related purposes, and a further 11% intend to start doing so in the future.

“Many investors recognise the value of social media in their investment decision-making process, most often using it to deepen their knowledge, keep abreast of the latest developments and network with like-minded investors,” said Peker.

“Along with the rising prominence of digital engagement platforms such as social media, blogs and online forums, a new wave of brokers such as SelfWealth and Stake are leveraging these platforms to gain traction with online investors, especially the younger crowd,” added Peker. “These new challengers make effective use of online media channels to raise their brand profile and engage with their audience by focusing on a seamless user experience or building a vibrant online community.”

Investors embrace advancements in consumer technology

The Australian online investor population is largely attuned with the latest technological developments – both within the realm of investing and the broader consumer technology space. For instance, half say they are familiar with the concept of robo-advice (or digital investing platforms), and when asked their opinion on voice-activated smart speakers (such as Apple Siri or Amazon Alexa), two in three believed these applications were useful.

Many online investors believe smart speakers make life easier by simplifying access to general information (45% say so) and investing-related data (26%), but many would also be interested in receiving general investing-related advice (15%) or buying and selling shares (13%) using verbal commands.

“Australian online investors appreciate technology, tools or resources that improve their investing experience,” said Peker. “The interest shown by online investors in smart speaker technology emphasises the depth of their demand for convenient and timely access to information in their investment decision-making.”

About the report

This report provides a detailed analysis of the Australian online broking market, examining attitudes, behaviour and product usage among active online investors.

Based on a survey of 8,462 investors and traders, the Investment Trends 2018 2H Online Broking Report is the largest and most comprehensive independent study of the online stockbroking industry in Australia.