Advisers needed to meet investors’ performance desires
Investors are likely to need guidance from a financial adviser to balance risks with performance in post COVID-19 markets, according to Natixis Investment Managers.
The firm said its survey of Australian investors found they were seeking a 13.5% real annual return this year, only down 0.3% from expectations of 13.8% returns last year. In fact, respondents said managed to exceed expectations with returns of 14% in 2020.
This expectation of higher returns was based on the positive COVID-19 experience in Australia with over half of respondents unaffected by job loss or financial setbacks. Some 80% said they felt financially secure and 73% expected to be financially secure in retirement.
However, interest rates and inflation were a concern and investors were worried they would affect their ability to generate an income in retirement. They were also concerned about balancing risk and investment performance.
Damon Hambly, chief executive of Australia for Natixis IM, said: “Australian investors are going to have to take on some risk if they want to achieve their double-digit returns and their more longer-term investment goals.
“It is clear that Australian investors trust their financial advisers (89%) and they will need to work with them in this recovery phase of the market to ensure their investment portfolio has the right mix of actively-managed funds to achieve the desired result.
“The challenge for many will be to ensure that investors trade on realistic expectations and rationalising those expectations with genuine tolerance for risk, overcoming their fears, and ultimately putting into practice the critical lessons they have learned around spending and avoiding emotional decisions.”
AUTHOR
Laura Dew
Recommended for you
High-net-worth clients with between $5-10 million are found to have the greatest unmet advice needs, according to LGT Crestone, with inheritance planning viewed as the most-sought after help.
The advice industry is in an “arms race” according to minister for financial services, Daniel Mulino, around the use of technology in superannuation switching scams such as Shield Master Fund.
Advisers are now serving more ongoing clients, according to a CFS report, but efficiency limitations continue to hinder the 82 per cent looking to serve more.
The FAAA is hopeful the education and experience pathway deadline will be the “last big thing” that could cause an adviser exodus but concern now turns to advisers moving to the wholesale space.
