Planners still wary
Financial planners and fund managers are wary of risks in the global economy, but are still open to market opportunities and looking at how to get clients into more active investments.
These were among the findings from live surveys conducted at last week’s van Eyk conference in Sydney among more than 400 planners and fund managers.
Asked to choose from four potential economic scenarios, a majority still believed there is around a 25 per cent possibility of a hard landing for the global economy as a result of a slowdown in China, a sovereign credit crisis in Europe and natural disasters in Japan.
A majority of respondents said there was a less than 30 per cent chance of a ‘strong growth, low inflation’ scenario evolving over the next year, while throughout the day attendees lowered their expectations of a strong developed market growth outlook from a 22 per cent chance down to 17 per cent.
The anticipation of a high inflation scenario or of a ‘muddle through’ scenario featuring continued deleveraging, saving, quantitative easing and low interest rates, together represented a probability of nearly two-thirds in respect to the likely investment environment by the end of the day.
An ideal portfolio response based on the audience’s economic views would be underweight to growth assets such as equities and buy defensive assets such as real estate, fixed income and cash, resulting in a cautious portfolio with an emphasis on international assets, according to van Eyk.
Delegates in general also believed term deposit allocations were slightly too high; environmental, social and governance issues should be considered in valuations; and a globally diverse portfolio would generate better returns than just investing in an Australian portfolio.
Recommended for you
The FSCP has announced its latest verdict, suspending an adviser’s registration for failing to comply with his obligations when providing advice to three clients.
Having sold Madison to Infocus earlier this year, Clime has now set up a new financial advice licensee with eight advisers.
With licensees such as Insignia looking to AI for advice efficiencies, they are being urged to write clear AI policies as soon as possible to prevent a “Wild West” of providers being used by their practices.
Iress has revealed the number of clients per adviser that top advice firms serve, as well as how many client meetings they conduct each week.
