Number of young Singaporeans who trust online investment advice swells to 83%

Are traditional sources already a thing of the past?

Young investors in Singapore prefer to receive investment advice from new media sources and trading services via emerging trading platforms more than traditional sources, a poll said.

According to Legg Mason Global’s 2016 Global Investment Survey, 83% of millennials and 77% of over-40-year-old investors in the city-state showed they “trust completely” or “trust somewhat” online advice provided by their professional financial advisor.

“This was generally in line with the global and Asia averages and was second only to China in the over 40 segment. Across generations, online advice from “financial news/major media organisations” came second and “family/friends/coworkers” third,” said Legg Mason Global.

The report expects the trend to grow as millennials and still younger investors make up an increasingly large portion of Singapore’s active labour force and investing public.

However, Legg Mason Global also said the results suggest that asset managers should continue to prioritise online investment advice models that rely on traditional channels.

“The survey makes it clear that we have to continue providing investment advice through traditional online channels that enjoy a high degree of trust across age groups. But we cannot ignore the fact that more than half of millennials have ‘trust’ in online investment advice received via an ‘online platform (robo-advisor)’ (61%) and ‘forums, blog posts & alternative media’ (54%). And while the level of trust in these sources is lower among over 40 investors (44% and 37%, respectively), this still represents a significant portion of older investors.” said Lennie Lim, managing director of Legg Mason Global Asset Management in Asia.

Lim, however, was quick to remind that investors should exercise caution about taking online investment advice, regardless of the source.

“Nothing can replace adequate due diligence on the part of investors. This can include cross checking numerous sources of advice, including the professional investment advisor they have a standing relationship with,” Lim explained.