Trump’s whiplash decisions prompting portfolio changes by advisers
Despite the perception that short-term market events shouldn’t affect portfolio decisions, Praemium research finds 60 per cent of advisers have made portfolio changes in response to US President Donald Trump’s decisions.
The last several months have seen international markets rocked following Trump’s so-called “Liberation Day”, sparking significant anxiety among investors.
Looking into the impact of these events, research conducted by Praemium in conjunction with CoreData found that six in 10 advisers claimed the actions of US President Donald Trump had moderate to major impacts on portfolio construction.
As a result, 60 per cent of advisers reportedly made changes to their investment strategy in response to the subsequent market volatility that occurred.
Advisers also noted a rise in uncertainty that has seen 47 per cent reporting increased communication volumes as well as a “heightened need for reassurance”.
This need for greater support was particularly prevalent among high-net-worth (HNW) advisers, a third (35 per cent) of which reportedly dedicated four or more hours per client over the last six months to strategy reviews.
Even so, around three-quarters of advisers (73 per cent) said they were still “cautiously optimistic” about risk and long-term investing.
However, a lack of flexibility and agility are proving to be hurdles in advisers’ ability to react quickly to rapidly changing market conditions.
Namely, the research revealed that navigating volatile markets was the top challenge (36 per cent) for advice businesses, followed by the burden of managing increased client communication (33 per cent).
With market fluctuations expected to continue, advisers said that the ability to make rapid, informed decisions, speed in execution and trading and timely data were crucial to their ability to successfully respond to today’s markets.
Speaking on the findings, Praemium chief strategy officer Denis Orrock said that current global market conditions are seeing advisers have to respond to rapid changes while also devolving time to support clients through these inevitable swings.
“In order to keep delivering this value for their clients, advisers have a growing need for platforms and tools that can support more frequent reviews, scenario modelling, and timely reporting in volatile markets,” Orrock said.
AUTHOR
Shy-Ann Arkinstall
Recommended for you
The new financial year has got off to a strong start in adviser gains, helped by new entrants, after heavy losses sustained in June.
Michael McCorry, chief investment officer at BlackRock Australia, has detailed how investors are reconsidering their 60/40 portfolios as macro uncertainty highlight the benefits of liquid alternatives.
Having reset its market focus to high-net-worth advisers, Praemium’s administration solution has been selected by Bell Potter in a deal that increases the platform's funds under administration by $6 billion.
High transition rates from financial advisers have helped Netwealth’s funds under administration rise by $3.7 billion in the fourth quarter of FY25.
