Welcome to the Fear and Greed Business Interview. I'm Sean Aylmer. Today we're taking a close look at two very different types of investors with your help of someone who works with both. Ryan Phillips is head of BEURL Direct Advantage, which is part of Bell Financial Group, a great supporter of this podcast. He's spent twenty five years studying the habits and strategies of day traders, and at the same time he works with ultra wealthy, high net worth investors, who I'm assuming have a pretty different approach to markets. Remember this is general information only, and you should always seek professional advice before making investment decisions. Ryan Phillips, Welcome to Fear and Greed.

Welcome to the Fear and Greed Business Interview. I'm Sean Aylmer. Today we're taking a close look at two very different types of investors with your help of someone who works with both. Ryan Phillips is head of BEURL Direct Advantage, which is part of Bell Financial Group, a great supporter of this podcast. He's spent twenty five years studying the habits and strategies of day traders, and at the same time he works with ultra wealthy, high net worth investors, who I'm assuming have a pretty different approach to markets. Remember this is general information only, and you should always seek professional advice before making investment decisions. Ryan Phillips, Welcome to Fear and Greed.

Thanks Sean, Thanks very much for having me unlock.

Thanks Sean, Thanks very much for having me unlock.

The mystery of day traders for me. Please you hear so much about them. I think they're courageous folk. Tell me about them.

The mystery of day traders for me. Please you hear so much about them. I think they're courageous folk. Tell me about them.

Yeah, they certainly are. So there's I guess there's two types of investors. There's obviously the high net worth investors that are looking to invest into the market with a sort of a medium to long term strategy, and then you also have the active day traders that make up quite a large percentage of the trading volumes that occur on the ASEX each day, and those particular types of clients, the traders in particular, are quite interesting characters. They are, I guess, the clients that are trading on momentum. Their clients who looking for intra day movements and to make short profits looking at each of those securities, whether it be warrants or equities. But they are very much what they call classify also as swing traders.

Yeah, they certainly are. So there's I guess there's two types of investors. There's obviously the high net worth investors that are looking to invest into the market with a sort of a medium to long term strategy, and then you also have the active day traders that make up quite a large percentage of the trading volumes that occur on the ASEX each day, and those particular types of clients, the traders in particular, are quite interesting characters. They are, I guess, the clients that are trading on momentum. Their clients who looking for intra day movements and to make short profits looking at each of those securities, whether it be warrants or equities. But they are very much what they call classify also as swing traders.

So there's a turn there. I just want you to define, because everyone talks about momentum trading, it's basically just going off what's happening, what has just happened? Is that right? It is?

So there's a turn there. I just want you to define, because everyone talks about momentum trading, it's basically just going off what's happening, what has just happened? Is that right? It is?

Yeah, So they're looking for opportunities where maybe a company has just made an announcement or there's been a recent surge in the share price. So they create themselves some alert capability to try and identify those opportunit unities. And when a stock has moved six or seven or ten percent in a short span of time, then that opens up an opportunity for those clients to trade based off that momentum. So they're looking to, you know, to follow the upward trend of a security and make sure term profits, as I said along the way, So and they're using various tools as well to do that.

Yeah, So they're looking for opportunities where maybe a company has just made an announcement or there's been a recent surge in the share price. So they create themselves some alert capability to try and identify those opportunit unities. And when a stock has moved six or seven or ten percent in a short span of time, then that opens up an opportunity for those clients to trade based off that momentum. So they're looking to, you know, to follow the upward trend of a security and make sure term profits, as I said along the way, So and they're using various tools as well to do that.

Yeah, So I want to ask, so day traders, it's successful day traders, I presume actually have a strategy. They don't just sit down at their desk and say what am I going to do today? Presumably there's a lot more to it than that.

Yeah, So I want to ask, so day traders, it's successful day traders, I presume actually have a strategy. They don't just sit down at their desk and say what am I going to do today? Presumably there's a lot more to it than that.

Yeah, yeah, and there is, right, So that what they're what they're looking for is is those alerts, those triggers that occur in the market, and then they'll they will trade off the back of that trigger. So you know, they're there forever during the day scouring opportunities. So they're looking for recent announcements, recent market movements, and then they would use particular trading tools, like what we call advanced order types to be able to take advantage of those orders. So you'd be aware that there is there's two exchanges in Australia at the moment. There's the AX and there's also Cebo. So there's quite a lot of volume that goes through both exchanges. But in particular, if you place an order, for example, on Cebo, there may not be as much volume as you see on the AX. So these these active day traders are utilizing both exchanges to get that competitive advantage to try and get that order priority, and that's that's really important for these clients. There is the speed to market and the order priority to get their order executed first, to be then able to get out in quick succession there shortly thereafter.

Yeah, yeah, and there is, right, So that what they're what they're looking for is is those alerts, those triggers that occur in the market, and then they'll they will trade off the back of that trigger. So you know, they're there forever during the day scouring opportunities. So they're looking for recent announcements, recent market movements, and then they would use particular trading tools, like what we call advanced order types to be able to take advantage of those orders. So you'd be aware that there is there's two exchanges in Australia at the moment. There's the AX and there's also Cebo. So there's quite a lot of volume that goes through both exchanges. But in particular, if you place an order, for example, on Cebo, there may not be as much volume as you see on the AX. So these these active day traders are utilizing both exchanges to get that competitive advantage to try and get that order priority, and that's that's really important for these clients. There is the speed to market and the order priority to get their order executed first, to be then able to get out in quick succession there shortly thereafter.

How much and we're staying with day traders will come to high networth individuals at the moment. How much has technology slash automation changed their world?

How much and we're staying with day traders will come to high networth individuals at the moment. How much has technology slash automation changed their world?

Yeah, very much so over the years. So I think one of the things is is that you know, we're touching on the active advanced order types, but it's also the market screening tools, and I think they're the types of things that really gain the attraction of these clients because for them to get that competitive advantage, they need to know what's going on before anybody else, and so in their mind it's about, Okay, how do I identify the next opportunity. So the technology is advanced in terms of being able to not only place your order, but to actually find the opportunity. And then it's also having access to some of these other tools such as algorithms and things like that, so you can you can get your order managed in a quicker fashion than your average retail mom and dad investor.

Yeah, very much so over the years. So I think one of the things is is that you know, we're touching on the active advanced order types, but it's also the market screening tools, and I think they're the types of things that really gain the attraction of these clients because for them to get that competitive advantage, they need to know what's going on before anybody else, and so in their mind it's about, Okay, how do I identify the next opportunity. So the technology is advanced in terms of being able to not only place your order, but to actually find the opportunity. And then it's also having access to some of these other tools such as algorithms and things like that, so you can you can get your order managed in a quicker fashion than your average retail mom and dad investor.

And how many day traders are out there? There seems to be a stack, But I wouldn't have a clue whether we're talking one hundred or one hundred thousand, to be honest.

And how many day traders are out there? There seems to be a stack, But I wouldn't have a clue whether we're talking one hundred or one hundred thousand, to be honest.

Yeah, So there's what when we look at day traders in the market, you're looking at I think, forgiven me if I don't have the correct stats, but there's something like sixty thousand active day traders who are trading multiple times a day, every day of the year. So yeah, there's quite a large amount.

Yeah, So there's what when we look at day traders in the market, you're looking at I think, forgiven me if I don't have the correct stats, but there's something like sixty thousand active day traders who are trading multiple times a day, every day of the year. So yeah, there's quite a large amount.

And are they is it mostly equities or is it derivatives? What are they trade?

And are they is it mostly equities or is it derivatives? What are they trade?

Yeah, so you've got a combination of clients who trade equities as well as derivatives, as well as CfDS. But in the space that I've always looked after is virtually the equities and the warrants space. Now now you've got clients who day trade options as well, so exchange traded options. But I think you'll find that that's quite a smaller sample size in terms of CfDS and options. But in the equities space that that would make up, i'd say about ninety percent of that sixty thousand in terms of day traders.

Yeah, so you've got a combination of clients who trade equities as well as derivatives, as well as CfDS. But in the space that I've always looked after is virtually the equities and the warrants space. Now now you've got clients who day trade options as well, so exchange traded options. But I think you'll find that that's quite a smaller sample size in terms of CfDS and options. But in the equities space that that would make up, i'd say about ninety percent of that sixty thousand in terms of day traders.

And many of them are successful.

And many of them are successful.

I presume, yeah, quite a lot are. You do tend to find some clients that have become success stories overnight don't tend to stick around year after year. But you do find that in some of the clients that I've been looking after for the last twenty years, as I said, have still been with me for twenty years later, and they're the ones that are quite disciplined, so they don't steer away from their strategy. And I think that's the trick here, is that you've got when you've got a strategy, you don't try and steer away from it and try something different because you fall in love with the stop for example, you need to be quite setting your ways.

I presume, yeah, quite a lot are. You do tend to find some clients that have become success stories overnight don't tend to stick around year after year. But you do find that in some of the clients that I've been looking after for the last twenty years, as I said, have still been with me for twenty years later, and they're the ones that are quite disciplined, so they don't steer away from their strategy. And I think that's the trick here, is that you've got when you've got a strategy, you don't try and steer away from it and try something different because you fall in love with the stop for example, you need to be quite setting your ways.

Ryan, stay with me. We'll take a quick break and come back and talk about high net worth investors. We'll be back in a moment. I'm talking to Ryan Phillips, head of Bell Direct Advantage. We've talked plenty about day traders. High network investors are a very different beast, and there's probably a bit rude calling them a boast. You've spent much of your career working with your ultra wealthy first comsech and Bell direct advantage. How do they trade?

Ryan, stay with me. We'll take a quick break and come back and talk about high net worth investors. We'll be back in a moment. I'm talking to Ryan Phillips, head of Bell Direct Advantage. We've talked plenty about day traders. High network investors are a very different beast, and there's probably a bit rude calling them a boast. You've spent much of your career working with your ultra wealthy first comsech and Bell direct advantage. How do they trade?

Yeah, so high networth clients are very much reliant upon your service. So a lot of the high net worth clients they have I guess a longer time horizon and research is quite important to this segment, so they do a lot more research than your average clients. We tend to find that they're not just researching and looking at research reports from different financial institutions, but they're also trying to speak with the companies directly. They would like to speak with an analyst directly, so their needs are quite different as well as there the way of investing as well. So when they are placing orders, they generally are larger in size, so it's important for them to be able to have access to somebody who can manage the order for them in the market. What you generally see is that these clients would call through an order it may be in the millions of dollars, and instead of putting it in in one large line into the market, which could potentially spook the market, we would actually manage the order throughout the day and over the course of the day, whether it's using algorithms or actually managing the order ourselves. That's really really important to these clients because otherwise, if you're placing an order for five thousand units in CSL, the only way to really manage that order is to feed it in dribs and drabs.

Yeah, so high networth clients are very much reliant upon your service. So a lot of the high net worth clients they have I guess a longer time horizon and research is quite important to this segment, so they do a lot more research than your average clients. We tend to find that they're not just researching and looking at research reports from different financial institutions, but they're also trying to speak with the companies directly. They would like to speak with an analyst directly, so their needs are quite different as well as there the way of investing as well. So when they are placing orders, they generally are larger in size, so it's important for them to be able to have access to somebody who can manage the order for them in the market. What you generally see is that these clients would call through an order it may be in the millions of dollars, and instead of putting it in in one large line into the market, which could potentially spook the market, we would actually manage the order throughout the day and over the course of the day, whether it's using algorithms or actually managing the order ourselves. That's really really important to these clients because otherwise, if you're placing an order for five thousand units in CSL, the only way to really manage that order is to feed it in dribs and drabs.

Are they buying a different types of equities or asset classes than day traders, for example.

Are they buying a different types of equities or asset classes than day traders, for example.

Yeah, very much so. So the average day trader is looking for the security that's trading more in the sense usually growth companies that aren't necessarily profitable, because they're looking for that larger intra day movement. Whereas the ultra high network clients, they are looking at more at your blue chip securities. And some of the securities that we've seen over the last twelve months that have all seemed to do quite well are the likes of your Promedicus, your tear Links, your jbhigh Fire, your three sixty. These are companies that have been trading at the fifty two week high. They're all generating revenue, and these are the types of securities that our clients, especially the ultra high network clients, are looking to invest in more secure a mix of growth as well as yield. That tends to be the theme over the last several years.

Yeah, very much so. So the average day trader is looking for the security that's trading more in the sense usually growth companies that aren't necessarily profitable, because they're looking for that larger intra day movement. Whereas the ultra high network clients, they are looking at more at your blue chip securities. And some of the securities that we've seen over the last twelve months that have all seemed to do quite well are the likes of your Promedicus, your tear Links, your jbhigh Fire, your three sixty. These are companies that have been trading at the fifty two week high. They're all generating revenue, and these are the types of securities that our clients, especially the ultra high network clients, are looking to invest in more secure a mix of growth as well as yield. That tends to be the theme over the last several years.

With high net worth individuals, do they say, we've been talking about equities here, What about other as class has been private equity or the bonds or infrastructure, real assets, those types of things. It seems to me, when you have more time to consider it, you're kind of more likely to get into it. But maybe I'm wrong.

With high net worth individuals, do they say, we've been talking about equities here, What about other as class has been private equity or the bonds or infrastructure, real assets, those types of things. It seems to me, when you have more time to consider it, you're kind of more likely to get into it. But maybe I'm wrong.

No, No, you're right, And I think hybrids has been one of the assets that these highwidth clients have invested in over recent years. Now with the hybrids winding down, they are looking for an alternative asset, So that'll be interesting to see what comes of that, whether it's government bonds. Private equity has seen an increase and we've seen some good results from private equity firms over the last couple of years, and we have seen an increase in clients moving away from part of their investments into equities into private equity. And we've seen quite a bit over recent times into private credit as well. So there's been a large inflow of money into private credit with some of the banks not entering that particular asset class anymore.

No, No, you're right, And I think hybrids has been one of the assets that these highwidth clients have invested in over recent years. Now with the hybrids winding down, they are looking for an alternative asset, So that'll be interesting to see what comes of that, whether it's government bonds. Private equity has seen an increase and we've seen some good results from private equity firms over the last couple of years, and we have seen an increase in clients moving away from part of their investments into equities into private equity. And we've seen quite a bit over recent times into private credit as well. So there's been a large inflow of money into private credit with some of the banks not entering that particular asset class anymore.

I suppose that's the thing. With day traders or high networth individuals, you probably still find trends, so private credit being a great example where it's almost the favor of the year, and so people jump into it and no value judgment of that that it's good or bad. It's just what they're all thinking.

I suppose that's the thing. With day traders or high networth individuals, you probably still find trends, so private credit being a great example where it's almost the favor of the year, and so people jump into it and no value judgment of that that it's good or bad. It's just what they're all thinking.

About, that's right. Yeah, And as people are talking about it, the media is talking about it, they feel that they probably they should be invested in it. And I think the same thing goes with cryptocurrency. So with bitcoin for example, So as more and more people talk about it, and when you open the CNBC app, for example, there's now a dedicated section for bitcoin and ethereum. So when you have high network clients looking at these sources of information and they're seeing that particular asset class, they feel that maybe they should be invested in it. And we're seeing more people investing into those particular assets, albeit small amounts, just to get started because there's still some concern around some of those assets. We are seeing a shift away from some clients entering just into equities.

About, that's right. Yeah, And as people are talking about it, the media is talking about it, they feel that they probably they should be invested in it. And I think the same thing goes with cryptocurrency. So with bitcoin for example, So as more and more people talk about it, and when you open the CNBC app, for example, there's now a dedicated section for bitcoin and ethereum. So when you have high network clients looking at these sources of information and they're seeing that particular asset class, they feel that maybe they should be invested in it. And we're seeing more people investing into those particular assets, albeit small amounts, just to get started because there's still some concern around some of those assets. We are seeing a shift away from some clients entering just into equities.

A fun job. You got looking at the you know where people are investing it is?

A fun job. You got looking at the you know where people are investing it is?

It is there. I mean, it's never a dull moment. It's a very interesting profession. And every day you see something different, and you're speaking to all sorts of people from all all walks of life as well. So there's some people that you know, they're sitting there at home and they're in their pajamas. Some of the day traders and you know they're up at seven o'clock in the morning looking at the markets. And then you're speaking to clients that are on the other side of the world. And I had a conversation just recently with a client that's on a fast, fast speed train in China right sending me photos training from the you know, from from from from China, and it's it's quite it's quite interesting and enjoyable. But yeah, it's I've been doing for twenty five years and couldn't think of doing anything different.

It is there. I mean, it's never a dull moment. It's a very interesting profession. And every day you see something different, and you're speaking to all sorts of people from all all walks of life as well. So there's some people that you know, they're sitting there at home and they're in their pajamas. Some of the day traders and you know they're up at seven o'clock in the morning looking at the markets. And then you're speaking to clients that are on the other side of the world. And I had a conversation just recently with a client that's on a fast, fast speed train in China right sending me photos training from the you know, from from from from China, and it's it's quite it's quite interesting and enjoyable. But yeah, it's I've been doing for twenty five years and couldn't think of doing anything different.

Fantastic, Ryan, thank you for talking to Fear and Greed.

Fantastic, Ryan, thank you for talking to Fear and Greed.

Thanks very much.

Thanks very much.

That is Ryan Phillips, head of Bell Direct Advantage, which is a great supporter of this podcast. This is the Fear and Greed Business Interview. Remember this is general information only, and you should always seek professional advice before investing. Join us every morning for the full episode of Fear and Greed. Daily business news for people who make our own decisions. I'm sho al ma' Shollyday,

That is Ryan Phillips, head of Bell Direct Advantage, which is a great supporter of this podcast. This is the Fear and Greed Business Interview. Remember this is general information only, and you should always seek professional advice before investing. Join us every morning for the full episode of Fear and Greed. Daily business news for people who make our own decisions. I'm sho al ma' Shollyday,