Self-Directed Investors Urged to Assume Greater Responsibility
Self-Directed Investors Urged to Assume Greater Responsibility
2
The evolving landscape of private credit funds in Australia necessitates greater responsibility from self-directed investors, according to Darren Connolly, the Chief Executive of Investment Markets.
As the landscape of fixed income investments becomes increasingly complex, investors are being urged to take ownership of their decision-making processes.
Historically seen as a safer component of investment portfolios, fixed income products have recently revealed challenges due to hidden complexities and illiquid exposures. Connolly warns that in such a volatile environment, investors must remain vigilant and proactive in understanding their investments.
With the proliferation of financial technology, a wider array of investment options is available, empowering investors but simultaneously increasing the need for caution. Connolly emphasizes that while the variety is exciting, it can also overwhelm investors. He stresses the importance of education and engagement, highlighting the need to comprehend all investment risks, including liquidity, governance, and valuations.
The Australian private credit market exemplifies these challeemphasisesnges. Managing an estimated $40 billion and representing 2.5% of total business debt, this sector has become significant. From 2014 to 2024, retail private credit funds under management surged from $600 million to $2.8 billion, marking a 240% increase. This rapid growth has strained regulatory frameworks, prompting attention from regulators like ASIC and APRA.
While regulatory bodies are enhancing their focus on the trustees managing private credit funds, Connolly insists that investors and advisers cannot rely solely on these bodies for protection. The industry's transparency is expected to improve, but investors must remain vigilant and conduct their own due diligence. This includes scrutinizing fund managers’ capital commitments, redemption terms, and valuations, as well as fully understanding any investment before proceeding.
Connolly concludes with a reminder that higher returns correlate with higher risks, and the importance of avoiding investments that are not fully understood cannot be overstated. In the quest for better-informed decision-making, self-directed investors are encouraged to prioritize education and active engagement, ensuring their ability to make prudent investment decisions.
Published:Thursday, 14th Aug 2025 Source: Paige Estritori
Last week, the Reserve Bank of Australia (RBA) made its third rate cut this year, lowering the official cash rate by 0.25% to 3.60%. Historically, such rate reductions have been linked to a significant rise in Australian home values, with double-digit growth expected within two years of the start of a rate-cutting cycle, according to the Australian Financial Review. - read more
In a recent financial disclosure, Bell Financial Group (BFG) announced a notable 44% drop in half-year net profit after tax as it navigates challenging market conditions. While the company's overall revenue declined by 12.5% to $121.5 million, its Technology & Platforms and Products & Services units showed resilience with a combined revenue increase of 12% to $46.3 million. This contrasts sharply with the 23.5% revenue dip in its broking division, which totalled $69.4 million. - read more
The evolving landscape of private credit funds in Australia necessitates greater responsibility from self-directed investors, according to Darren Connolly, the Chief Executive of Investment Markets. As the landscape of fixed income investments becomes increasingly complex, investors are being urged to take ownership of their decision-making processes. - read more
Applying for a loan online streamlines the traditional borrowing process, offering a convenient and fast route to financial assistance. With the advent of technology, borrowers can now complete the entire loan application process from the comfort of their own homes. This digital evolution brings with it a series of steps that, when executed correctly, can result in swift loan approvals. - read more
When you embark on the journey of securing a loan, one pivotal factor that looms large in the eyes of lenders is your debt-to-income ratio, commonly known as DTI. This crucial metric measures the chunk of your monthly income that goes towards paying debts, and it serves as a barometer for financial stability. A lower DTI can swing the doors wide open to favorable loan terms, while a higher one might signal red flags for potential lenders. - read more
Creditworthiness represents a cornerstone in the world of finance, serving as the gauge by which lenders assess an individual's reliability in repaying debt. It's this measurement that can open doors to various financing opportunities or, conversely, become a barrier to accessing essential credit lines. So, what is creditworthiness, and why does it matter? - read more
