Wealth managers ‘unconcerned’ by recession fears
Only five of 65 wealth managers around the world surveyed by independent market analyst Datamonitor said that a potential recession most worries them.
The finding follows the release of three Datamonitor research reports that foresee a sustained economic downturn in 2008—09, which will have a significant negative impact on money managers.
“Despite the evidence that major world economies are heading for trouble, the vast majority of wealth managers seem unconcerned,” said Datamonitor financial services analyst Michele Gorman, also author of one of the reports.
“As late as September 2007, most of these companies surveyed did not believe there would be a downturn, putting them at risk of losing both their clients and their investment returns.”
The survey also found few of the wealth managers had formally communicated their market view to clients on the impact of volatility on their portfolios, despite most clients wanting to know.
“This failure to communicate leaves most investors uncertain about their financial future during a time when their needs are changing.”
At the same, he said the survey found that several wealth managers are well-positioned to take advantage of these shifts in clients’ financial thinking.
“As Central Banks cut rates to kick-start the economy, wealthy individuals’ high credit ratings make them particularly attractive targets for remortgaging programs.”
First Republic, Wells Fargo, US Bank’s Private Client Group, Citi Private Bank and UBS Wealth Management already have remortgage programs in place, and these are likely to increase.
Recommended for you
ASIC has issued infringement notices to two AFSLs over financial advisers providing personal advice while they were unregistered.
Australian retirees could increase their projected annual incomes by as much as 51 per cent through comprehensive financial advice, according to a Vanguard study, but cost continues to be an issue.
AMP has announced a senior appointment to its North leadership team, reinforcing the firm’s commitment to the advice industry.
Despite the financial adviser exam being rooted in ethics, two professional year advisers believe the lack of support and transparency from the regulator around the exam is unethical.
