Financial advisers are pulling clients back from the banking sector so far in 2025 and spreading new trades across a broader range of companies, according to an analysis by AUSIEX.

The stocks that typically rank among the “top buys” by advised clients were absent from the list of the most bought stocks on the AUSIEX platform in February. 

This included not just the major banks but also several mining companies that often feature among the most popular stocks for that cohort of investors. BHP (ASX: BHP) and Woodside Energy Group (ASX: WDS) were the only companies in the two biggest sectors in the Australian market to rank among the stocks most bought by advised investors over the month.

“Advisers who use our platform spread clients’ capital across a broad range of blue chips in February. It perhaps indicates they expect returns to be evenly spread across the market in coming months,” says Chris Hill, National Manager Strategic Relationships at AUSIEX.

Telstra (ASX: TLS) was the most bought company by investors who employ financial advisers in February, followed by Goodman Group (ASX: GMG), pharmaceuticals group CSL (ASX: CSL) and shopping mall owner Scentre Group (ASX: SCG). 

Perth-based conglomerate Wesfarmers (ASX: WES), Woolworths (ASX: WOW) and private hospital operator Ramsay (ASX: RHC) also featured in their top 10 picks.

“The absence of major banks and other big resource companies from the list gives an insight into the investment strategies that advisers are recommending to clients in the current environment,” Chris says.

Mid cap moves

Non-advised investors largely stuck to materials and financials companies in their trading. Their top 10 buys were dominated by resources companies, led by Fortescue (ASX: FMG). Major banks, excluding ANZ (ASX: ANZ), were also among most bought companies for this group. 

Advisers’ preference for a greater variety in stocks was also evident in their exchange traded fund (ETF) selection. VanEck’s S&P/ASX MidCap ETF (ASX: MVE) was the most bought ETF by advised clients in February, a trend that reflects forecasts earlier this year that small-to-mid caps could outperform their bigger rivals in 2025. 

VanEck MSCI International Quality (Hedged) ETF (ASX: QHAL) was the second most bought ETF by advised clients. Betashares Australian Hybrid Active ETF (ASX: HBRD) ranked third as advisers continued to seek out the higher yield offered by the sector, despite the impending abolition of bank hybrids in Australia.

“Our data consistently shows demand for investments that suit income-hungry retail investors. Advisers are telling us that there will be a gap to fill in clients’ portfolios as bank hybrids are slowly phased out – expect to see more products come to market to fill the vacuum,” says Chris. 

The most bought ETFs by self-directed investors were instead concentrated on core holdings such as Vanguard’s Australian Shares Index ETF (ASX: VAS), iShares S&P500 AUD ETF (ASX: IVV) and Vanguard’s MSCI Index International Shares ETF (ASX: VGS). They also appear to have lost little of the fervour for AI-related stocks, with Betashares Nasdaq 100 ETF (NDQ: ASX) ranking as the fourth most bought ETF by non-advised investors in February.

Selling down

But what of the most sold stocks over the month? Commonwealth Bank (ASX: CBA) dominated the sell trades for advised investors who use the AUSIEX platform, with Westpac (ASX: WBC) and National Australia Bank (ASX: NAB) also featuring in their top 10 most sold companies.

“It appears that advisers may be reweighting clients’ portfolio to take account of the record run in CBA shares, in particular. This may well be part of the regular review process that advisers conduct to ensure investors’ asset allocation stays true to its original parameters,” says Chris.

“It’s also part of an adviser’s role to re-allocate capital to those parts of the market that offer the most potential for gains, obviously within the risk appetite of individuals,” he says.

There were some big differences in the trading choices of advised and non-advised investors in February – across both ordinary shares and ETFs. The role of advisers in allocating capital according to each client’s needs may account for the contrast in their preferences.

Never miss an article - sign up to the monthly AXIS email newsletter.