The Q4 Skandia International Adviser Confidence Barometer research reveals a 14% fall in offshore adviser’s confidence levels, compared with the Q3 research. It found that adviser’s confidence levels in the outlook for their local economies had fallen from 6.2 out of 10 last quarter to an average of 5.3, while confidence in the global economy dropped from 5.4 out of 10 to an average of 5.
Advisers in Singapore were the most upbeat on their economy with a score of 6.7, while advisers in the UK displayed the “greatest nervousness” with a below average score of 4.6. Skandia added that the UK was in fact the only region in which advisers rated the outlook for the global economy as more positive that the local market – all of the other regions displayed a bias for their local economies.
Skandia also found that as many as 55% of advisers – up from 37% last quarter – feel their clients have become more risk averse over the past three months, while 47% reported a reluctance on their clients’ part to invest at all. The company said that the ongoing Eurozone crisis seems to be taking its toll on investors locally, with 65% of European advisers believing their clients had become more risk averse over the quarter and 61% stating their clients were unwilling to invest at all
Only 4% of respondents felt their clients “may” be prepared to take more investment risk, significantly down from 17% last quarter. The uncertain economic outlook, coupled with the increased volatility in stock markets around the globe, may explain why half of all surveyed advisers stated their clients chose to invest less during the last quarter.
Buying opportunities
However, the research also revealed that some investors are looking to take advantage of buying opportunities. 13% of offshore advisers reported an increase in the number of clients wanting to make regular investment contributions, whilst 7% saw higher demand for lump sum investments. Perhaps the most significant encouraging finding was that the vast majority – 97% of respondents, confirmed that their clients were riding the storm rather than trying to sell their investments and crystallise any losses.
Phil Oxenham, marketing manager at Skandia International said: “This last temperature check was only taken a few weeks ago, when markets were exceptionally volatile. Whilst it looks like the economic uncertainty is set to continue for some time yet, it is encouraging to see advisers’ confidence in their local economies remaining relatively positive.
“The fact that the vast majority of clients are waiting for the storm to pass rather than giving in and selling their investments shows that investors, with support from their advisers, are taking a pragmatic approach, recognising that successful investing can only be achieved over the longer term.”
