Investors may be playing stockbrokers and financial planners at their own game by using them as a source of advice but then buying their shares through the internet and discounters.
In a survey of their members, the Australian Investors Association found that 45 per cent are using brokers to get research and advice, but only 27 per cent are using them to make transactions. More than 55 per cent use the internet to trade and 13 per cent use online discount brokers, meaning most trades are not associated with a broker or planner.
The same thing is happening with managed funds. Fund managers claim they receive 90 per cent of their new investments from financial planners, but the association's survey found that only a third of investors use a planner, with almost 25 per cent going directly to the fund manager and 35 per cent using a discounter or the internet.
President Bob Andrew concedes the association's members are not typical investors, but says they point the way to the future.
"We believe that investors are and will increasingly avoid the commission and brokerage systems which pollute and confuse the advisory and research processes," he says.
"Brokers and financial planners who rely on brokerage and commissions will, without question, find the market for their services diminishing and will have to charge for their advice on a genuine fee basis or find they are working for nothing."
Tech turnaround
The US technology market is rapidly recovering after a three-year recession, with the technology-laden Nasdaq rising more than twice as fast as the mainstream Dow Jones Index since last October.
Author and senior writer for Business Review Weekly, James Kirby, will discuss what is driving this turnaround in the technology markets, and the implications for Australia, at this Wednesday's ASX Investor Hour.
The lecture is on at noon and again at 1.10pm at the ASX Theatrette, level 1, 530 Collins Street, city. Cost $5.
Car insurance
In Money Manager's cover story, "How to cut the cost of your car insurance, (30/6/03) on page 6 last week, a comment that car theft was on the rise was incorrectly attributed to Susan Allen, general manager of RACV Insurance. Ms Allen said the cost of car theft was rising, even though the incidence of theft was declining.
In the same article, we published a panel: "What it costs to insure" and asked several insurers to supply quotes for drivers by rating and address. CGU Insurance says the figures it supplied, with the exception of the figures for the rating one, female driver, 66, of Geelong, were incorrect. To obtain the correct figures, you can phone 131 532.
Card caution
ATM and credit card fraud are on the rise. To help beat the crooks, InfoChoice has compiled the following tips:
Don't let anyone swipe your card twice without giving you a "transaction cancelled" receipt for the first swipe. Card-skimming, whereby fraudsters swipe cards through a second machine to record details, is on the rise.
Be on your guard when withdrawing money from ATMs. If there is anything unusual about the machine or people around you, don't transact.
Keep ATM receipts as proof of your transactions.
When buying over the internet, deal only with reputable online merchants whose sites offer full security (check the padlock sign at the bottom of your web browser).
Don't send card details by email as your details are not secure (if you must, send half the card number in one email, the rest in a second message).
Avoid paying by credit card over the phone or by mail order. If you must, give card details only to established companies with a verified physical address.
Keep your card in sight at all times to ensure no one copies the details.
Don't store copies of your password or security number with the card.
Beware of letterbox thieves. Arrange to pick up new or replacement cards from your branch rather than have them sent through the mail.
Check statements closely each month and report any unauthorised transactions to your bank immediately.
Read correspondence from your bank before discarding it - it may contain important card account information and not just marketing material.
