Wall of cash begins to crumble
Financial planner sentiment has returned to levels not seen since before the global financial crisis amid growing signs that the so-called "wall of cash" is beginning to crumble as investors seek to re-enter the market.
The latest research from Wealth Insights, provided within its Adviser Sentiment Index, has shown that planner confidence in February reached a level not seen since February, 2008 - before the sub-prime mortgage crisis in the US gave way to the global financial crisis.
Commenting on the latest research, Wealth Insights managing director Vanessa McMahon said financial planners were busier than they had been for some time, and this seemed to be reflecting not only the improvement in the share market but a general improvement in investor mood.
"I think people are tired of being negative and have accepted a new normal in which markets are lower and more volatile," she said.
McMahon said this seemed to have been genuinely reflected in the fact that the number of advisers reporting conditions as being very good or good now stood at 56 per cent, with a further 37 per cent suggesting things were average and only 6 per cent saying things were bad.
Equally, she pointed to investor behaviour and the willingness of clients to re-enter the market.
"As investor confidence improves, advisers are reporting a move back into markets," McMahon said.
She said only a tiny proportion (4 per cent) of investors were still looking to move into safe harbour allocations.
Comparing Wealth Insights December survey results with that of February this year, McMahon pointed to a near-doubling in the number of investors who were investing a lot, and the significant increase in those who were seen to be tentatively moving out of cash and more firmly into the markets.
Equally, there had been a decrease in those simply taking a wait-and-see approach.
"I think a part of the explanation is that both clients and advisers have bad news fatigue - and are no longer so readily spooked by negative headlines," she said.
AUTHOR
Mike Taylor
Recommended for you
Following an extraordinary general meeting today, Dixon Advisory parent company E&P Financial Group’s shareholders have voted on its proposed delisting from the ASX.
While overall financial adviser numbers have dipped below 15,500 this week, Rhombus Advisory is experiencing growth and approaching 500 advisers in its ranks.
Iress’ Xplan continues to dominate the financial planning software market with a multitude of uses, according to Netwealth research, despite newer players battling for a piece of the pie.
ASIC has shared the percentage of breach reports related to financial advice in FY24, noting increased reporting by smaller AFSLs.
