0. Investment Strategies Of Self-Directed Investors
Wealth management Australia
Investment Strategies Of Self-Directed Investors
David Sokulsky, PhD
Head of Investment Strategy
UBS Wealth Management Australia
This presentation has been prepared by UBS Wealth Management Australia Limited. Please see important disclaimers and disclosures at the end of the document. Past performance and forecasts are no indication of future performance. This applies to all performance charts and tables in this presentation.
February 2015

1. Introduction
Self–directed investors are becoming increasingly sophisticated in terms of how they invest and what they demand of service providers
HNW often have complex needs
More focus on cashlow
The world has changed with lower interest rates
The world is their oyster
Need guidance and access
Risk has become increasingly important 1

2. Misconception about HNW investors
Self–directed investors rarely come with a blank slate and have complex needs
Excess property exposure
Capital gains concerns
Concentrated holdings
Philanthropic intentions
Family / estate considerations 2

3. Investing has become more difficult
The economy is transitioning, yields are at record lows and markets have rallied strongly
Australian economy has historically been great for local investors but is transitioning
Cash no longer provides an adequate return
Central bank policy is dominating markets
Australian property and equity markets are no longer 'cheap' 3

4. Technology has opened up the world
Investing has become global as the opportunity offshore grows and risk at home increases
Australian equity market is very concentrated
Geographic concentration is becoming risker
Need to look offshore for global leaders and innovators
Need the technology and platform to allow global access 4

5. Need guidance to help them navigate the options
HNW investors often prefer to go direct but need a variety of access options and support
Fee sensitive as they have often built businesses from the ground up
See value in a differentiated offering with niche ideas
ETFs, Managed Funds, Direct Investments, Structured Products
Increased interest in hedge funds and private investments 5

6. The need to manage risk becomes important
Many wealthy investors are approaching retirement and are focused on risk
The GFC has shown baby-boomers that volatility needs to be managed
Cash flow in a low rate environment needs to be balanced with growth
Diversification is the key to managing risk when most have historically had concentrated portfolios
Need to provide the tools to manage and communicate risk
For illustration purposes only 6

7. What’s the difference
HNW investors still have a focus on Australian assets but this is changing fast
Typically have had a higher allocation to Australian equities but global allocations are growing
More focused on high yielding equities and hybrids for cashflow
Open to adopt alternatives but still via small allocations due to perceived risk
Absolute return focused not +CPI orientated 7

8. Conclusions
There is very little difference between what an institution and a self-directed investor expects but their needs differ
Their needs are often more complex than an institutional investor
A sophisticated global offering tailored to an investors specific risk profile is now expected
Portfolios have grown increasingly diversified with higher offshore allocations
They expect global opportunities and non-traditional offerings to be available and accessible
Source: UBS WM Global Chief Investment Office (CIO), UBS Wealth Management as at 3 February 2015 8

9. Required Disclosures
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