Online Share Trading – The Role of Education. September 2006. Richard Seddon – Head of Online Share Trading. Why do so few people invest directly in shares in South Africa?. Market in SA is very small (around 150,000 private clients accounts)
Richard Seddon – Head of Online Share Trading
Market trends and sentiments Africa?
Previous company losses/market performance in general
Investment trend at the time
Risk heightened by lack of knowledge and market trends
Perceptions of risk
“The risk is too high”
Stressful, an effort and time-consuming: “Shares need constant monitoring whereas other investments, you sit back and relax”Key barriers
Lack of knowledge
“From my point of view it’s a huge
Even greater need for knowledge Africa?
Yet financial advisors not fully trusted
Lack of confidence
Greater reliance on brokers and financial advisorsExploring the knowledge barrier
What is meant by a lack of knowledge?
Very basic knowledge required!
“Lack of confidence makes me feel very vulnerable. Anything can happen, anyone can tell me anything”
“I also feel intimidated by all the jargon and you feel you have to be some accountant to understand it”
Amount of money that is required to invest
“Ignorance….we always think the only way to buy shares is through a broker who require a minimum of R600 000 investment capital….you discover later other alternatives of doing it”
Influenced by lack of knowledge and market fluctuations
And the risk involvedLack of knowledge leads to misperceptions
Risk = heightened
Bad past experiences – linked ultimately to a lack of knowledge about competitive rates and playing the market
The main barriers are:
Issue more with investing in shares as opposed to it being through an online channel
95% compound growth pa in revenues since inception in 1999.
Education strategy started here