What fund managers could learn from supermarkets

Wednesday 18th November 2020 Penny Pryor

Australian investors are more open to buying investment products from supermarkets than many international investors, according to a white paper from global funds transaction network Calastone.

Fund supermarket

“One of the interesting points that came out was that Australian investors were open to investing in supermarkets,” Ross Fox, managing director, head of Australia and New Zealand at Calastone, said.

“These are known trusted brands that are known to provide products for a fair price.”

Investment management companies could take advantage of this and start to align the profile of their brand to those brands that investors trust and use on a daily basis - like the big Woolies and Coles.

Calastone surveyed 1800 respondents for the white paper, called Global Investor Behaviours and Attitudes, which also found Australian investors are open to buying investment products from technology companies - at 39 per cent - but supermarkets are their preferred alternative outlet.

Calastone table

Source: Calastone

Lack of confidence

Of all the countries surveyed, Australians were most worried about their financial future due to Covid-19, at 72 per cent.

“There is consumer appetitive to invest that capital but in some ways it is confidence that is lacking,” Fox said.

The investment management industry can tackle some of those barriers to entry by providing the right technology solution to the end investor.

Fox points out that a complex product disclosure statement is a difficult document for a first time investor to get their head around and can easily put them off.

Simplified ways of displaying key information for the investor, would therefore be one way to encourage investment.

Tokenisation

Another interesting development that may help reduce barriers to investing for some investors is micro investing or tokenisation.

“The digital tools now exist for units of investment funds to be tokenised,” Fox says.

This refers to splitting what was one unit into how ever many fractions to create liquidity of the investment unit and to provide the investor, who may have smaller amounts to invest, with access.

“From a regulatory perspective we see topics like tokenisation being discussed at industry events, it’s just about developing the understanding across the industry,” Fox says.

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