Financial planners still wary over market
Financial planner sentiment has shown little recovery so far in 2012, with planners remaining deeply cautious amid continuing bad news out of the Eurozone and uncertainty about the Australian regulatory environment, according to the latest data released by Wealth Insights.
The Wealth Insights Financial Planner Sentiment Index for June has recovered by barely a point since May, and is sitting at levels reminiscent of some of the darker days of the global financial crisis (GFC) - albeit much higher than the depths reached in February 2009.
What is very clear from the Wealth Insights data is that sentiment has remained generally cautious since the first quarter of 2011.
Commenting on the data, Wealth Insights managing director Vanessa McMahon said both financial planners and their clients remained very nervous and worried about global events, particularly the Eurozone crisis and instability in Greece.
"What this has translated into is a reluctance to advise clients to get back into the market," she said.
"A lot of money is still being directed towards term deposits.
"Planners are saying there is simply no clear-cut evidence that it is time to be advising their clients to get back in the market," McMahon said.
She said her company's focus group exercises suggested financial planners would remain cautious for some time to come, with few of them believing there was likely to be any significant improvement in the Eurozone, particularly in the short-term.
However, the uncertainty being felt by planners and the cautious investment settings being recommended to clients were not serving to undermine the health of financial planning practices.
McMahon said that while sentiment remained at low levels, this did not necessarily reflect the underlying health of financial planning practices, with most planning businesses still performing well, particularly those with well-established client lists.
"People may be cautious and investors may be subdued, but that is not translating into planners going out of business," she said.
"There does not appear to have been any significant reductions in numbers of clients or the level of funds under advice," McMahon said.
AUTHOR
Mike Taylor
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