Advisers adjust growth expectations by 80%
Advisers’ growth expectations have significantly dropped this year with advisers expecting to see average capital growth of just 0.7% this year.
This was down from 3.5% a year ago, research by Investment Trends found.
Advisers were also prioritising liquidity, protection and high-yield products as they adjusted to the economic conditions of rising inflation and interest rates.
While the top priority for portfolio construction remained diversification, cited by 68% of advisers, there was a growing number of advisers adjusting for the current economic conditions.
One in two advisers cited the economic conditions as having had a “significant impact” on client portfolio construction with more focus on liquidity, protection and high yield products than before. This meant higher allocations to assets such as cash, term deposits and fixed income.
Dougal Guild, research director at Investment Trends, said: “With interest rates on the rise, the proportion of new client money going into cash, term deposits and other fixed income products has increased by 43% this year, the highest it’s been for the past few years”.
More client money was also being allocated to managed accounts and exchange traded funds than previously rather than into managed funds. Allocations to managed funds fell from 45% in 2021 to 36% in 2022 and one in four advisers said they intended to stop using a fund manager altogether in the next 12 months.
The reasons given for this aversion to fund managers was poor performance, lack of confidence, customer service and poor communication.
Recommended for you
It can be extremely hard to realise the gains from financial advice M&A, according to Peloton Partners’ Rob Jones, and more could be gained from firms looking inward at their own practice.
With platforms reporting their quarterly results, there is a clear divide in the adviser markets they are targeting, according to platform specialist Recep Peker, and which would be right for your clients.
The Federal Court has imposed a $10 million penalty on Macquarie Bank for failing to prevent and control unauthorised fee transactions by third parties including financial advisers.
A financial advice firm has seen a weekly decline of 10 advisers, with all moving to a new licensee, while Centrepoint Alliance continues its “growth story”.
Add new comment