More understanding needed for high yield investments

financial advisers assets Mason Stevens

21 June 2016
| By Jassmyn |
image
image
expand image

Financial advisers are increasingly tempted to move into assets that are not widely understood but favoured thanks to attractive higher rates of interest on offer, Mason Stevens believe.

The firm said despite the search for yield, advisers should be better informed about the risks associated with high yield investment opportunities in the market.

It said advisers needed to consider the liquidity and market risk as well as correlation risks associated with higher yielding opportunistic investments.

Mason Stevens managing director, Thomas Bignill, said: "We see how this can be appealing in the short-term as advisers seek to meet client cashflow requirements".

Bignill noted that advisers were eager to learn more about fixed income opportunities too.

"What we are seeing is a renewed energy amongst advisers on the role that fixed income can play in asset allocation. By investing in high quality short-to-medium term bonds, fixed income can potentially facilitate the preservation of wealth," he said.

"Fixed income is a traditional asset class that fits well into client portfolios — particularly for those in pension phase. It's about consistency of income and that resonates with the end client."

Mason Stevens said to get the best out of fixed income investments, advisers should:

  • Understand what you are recommending;
  • Take a diversified approach to generating income; and
  • Look for independence.
Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

This verdict highlights something deeply wrong and rotten at the heart of the FSCP. We are witnessing a heavy-handed, op...

7 hours ago

Interesting. Would be good to know the details of the StrategyOne deal....

4 days 12 hours ago

It’s astonishing to see the FAAA now pushing for more advisers by courting "career changers" and international recruits,...

3 weeks 2 days ago

Insignia Financial has made four appointments, including three who have joined from TAL, to lead strategy and innovation in its retirement solutions for the MLC brand....

2 weeks 4 days ago

A former Brisbane financial adviser has been charged with 26 counts of dishonest conduct regarding a failure to disclose he would receive substantial commission payments ...

3 days 10 hours ago

Pinnacle Investment Management has announced it will acquire strategic interests in two international fund managers for $142 million....

2 days 13 hours ago