Planners cautious amid economic uncertainty

federal-budget/financial-planning/equity-markets/interest-rates/money-management/cent/

4 February 2015
| By Mike |
image
image
expand image

Economic uncertainty in the opening months of 2015 is prompting many Australian financial planners to adopt a cautious approach and to recommend to their clients that they adopt defensive strategies.

A webinar conducted by Money Management in association with the Australian Business Economists (ABE) and attracting 330 participants revealed the degree to which economic uncertainty had impacted the thinking of planners.

Asked whether 2015 would be a year of defensive strategies, just over half (51.3 per cent) of the webinar participants who were financial planners answered yes, while the remaining 48.7 per cent answered no.

However, just as importantly, a sizeable majority of planners participating in the webinar indicated they would not be recommending to clients that they increase their exposures to domestic equities this year.

The webinar poll revealed that 66.5 per cent of planners would not be recommending an increase in domestic equity exposure, with only 33.5 per cent suggesting they would.

More broadly, nearly 80 per cent of the webinar participants indicated they believed the Australian dollar would devalue further against the $US and that it would settle at below US78 cents.

Australian Business Economists members, Stephen Halmarick and Stephen Walters, outlined the key challenges facing investors this year, with both pointing to particular issues around currency.

Halmarick, the Head of Economic and Market Research at Colonial First State Global Asset Management pointed to economic growth continuing to support equity markets, but with downside risks around higher interest rates, wages and inflation.

For his part, Stephen Walter, the chief economist at J.P. Morgan Australia pointed to the manner in which Australia's terms of trade had tended to mask poor productivity.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

2 months 2 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months 3 weeks ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months 3 weeks ago

ASIC has suspended the Australian Financial Services Licence of a Melbourne-based financial advice firm....

6 days 20 hours ago

The corporate regulator has issued infringement notices to three AFSLs whose financial advisers provided personal advice to a retail client while unregistered....

1 week 5 days ago

ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test....

2 weeks 3 days ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND