Financial advisers show 'maturity' in portfolio management
Active portfolio management will be the key to success in current financial markets rather than a reliance on investment products alone, according to Wealthtrac.
Based on a survey of 30 of its member advisers, superannuation and investment platform providers, Wealthtrac found that almost 85 per cent had made changes to their clients' asset allocation in the past 12 months.
In addition, 80 per cent said they had sufficient access to products in order to meet their clients' needs.
Wealthtrac chief executive Matthew Johnson said the results reflect the "maturity in the approach from advisers".
"They are not just remaining passive and hoping markets will improve," he said.
"Instead they are looking for prudent strategies to preserve capital and achieve a reasonable level of return."
On average, 48 per cent of a client's portfolio was now focussed on capital preservation, 24 per cent on income and growth strategies and 5 per cent on cash, Wealthtrac stated.
Despite the focus on preserving capital, 70 per cent of respondents said they are prepared to accept some level of risk to generate strong returns. Less than 30 per cent said they are only willing to take on a very small amount of risk.
"Advisers cannot afford to leave their clients sitting in cash or they will never make up for the market losses of the past four years," Johnson said.
According to the study, 55 per cent of advisers said their clients remained "deeply scarred and bearish" following the global financial crisis, with just 4 per cent actively seeking benchmark outperformance.
In spite of this, 40 per cent of respondents said their clients understood market cycles and were now willing to look for opportunities.
AUTHOR
Staff Writer
Recommended for you
With the highest number of candidates in a year sitting the latest financial advice exam, a surge of new entrants are expected in the coming weeks, according to Wealth Data.
AMP has launched a range of five diversified index managed portfolios on its North investment platform, targeting a younger client demographic.
An NSW adviser, who advised over 120 clients after falsifying her financial advice exam results, has been permanently banned by ASIC.
ASIC has released the results from the latest financial adviser exam, the first to be run since changes to its structure earlier this year.
