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The rise of the Gen Y retail share investor

by Andrew Starke

Generation Y investors are a growing proportion of new direct investors in the sharemarket compared to their equivalents 20 years ago, according to CommSec analysis. To mark its 20 year anniversary, Australia’s largest retail share trading platform has undertaken a review of share trading and economic developments in Australia over the last two decades.

The analysis shows investors are entering the sharemarket at an earlier age with 28 per cent of 25-34 year olds now directly owning shares, and at CommSec there is an increasing proportion of young people becoming new investors.

 "Twenty years ago the majority of investors in the market were aged in their late 40s to 50s. The emergence of online broking has made the sharemarket more accessible and affordable to younger investors," said Paul Rayson, Managing Director, CommSec. "Our review shows that in 1995 only around 1 in 5 new investors using our platform were aged under 35. Now just over half of our new customer base is aged under 35.

“This shift in age demographic is a striking feature of a change in consumer behaviour looking back over the past 20 years. It demonstrates how younger people have embraced technology and become more self-directed in their approach to financial decision-making.”

On the move

This shift has also translated into a growing usage of mobile devices for investing. According to research from Investment Trends, 60 per cent of current online investors use a mobile device to monitor the market, trade shares and transfer funds.

“In CommSec, we have seen trading via mobile devices experience rapid growth over the past 12-18 months. Around 25 per cent of logins and 13 per cent of daily trades are now performed on mobile devices,” said Rayson.

A customer survey conducted as part of the 20 year anniversary found that the reasons people joined CommSec two decades ago are largely still the reasons they use the platform today. Both then and now, key reasons for using the platform are ‘making trading easy’, ‘value for money’, and ‘CommSec being part of the Commonwealth Bank’.

Investors still remain relatively cautious by ensuring their holdings are diversified across various sectors and today this extends beyond domestic share ownership, with 5 per cent of the Australian population now owning international shares.

Overall, 33 per cent of Australians over the age of 18 (an estimated 5.94 million people) now hold shares directly compared to 16 per cent or 1.98 million Australians in 1994. Of the Australian adult population, share ownership by women has also increased to 27 per cent and for males it is 38 per cent.

Originally published by Finsia

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