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
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
The Reserve Bank of Australia (RBA) recently made a pivotal decision to cut the official cash rate (OCR) by 0.25%, bringing it down to 3.60%. This move marks a total reduction of 0.75% from its peak of 4.35%. Economists and financial markets anticipate further cuts, potentially two more by mid-2026, reflecting a cautious easing policy by the RBA. - read more
Understanding interest rates is crucial when considering any loan. Interest rates determine how much you'll need to pay back over the life of a loan and can significantly affect the total cost. By gaining a solid grasp of how these rates work, you can make more informed decisions that could save you money in the long run. - read more
Understanding what a credit score is and its importance is crucial for anyone seeking a personal loan. A credit score is a numerical representation of your creditworthiness, typically ranging from 0 to 1200 in Australia, provided by credit reporting agencies. - read more
Before considering a loan application, it's crucial to have a clear understanding of your current financial position. Start by noting down all sources of income, including salary, any additional earnings, or government benefits. This will give you a comprehensive view of your financial inflows. - read more
Need Help Finding a Loan?
Find out now if you qualify and compare
rates, offers and options from multiple lenders - without a credit check!
All finance quotes are provided free (via our secure server) and without obligation. We respect
your
privacy.
Knowledgebase
Consumer Credit Code: An act of Parliament that governs the relationship that exists between borrowers and lenders.
