Adviser confidence cools in Q4 – Skandia poll
Offshore financial adviser confidence dropped by 14% in Q4 2011, but advisers in Asia remain relatively upbeat, according to Skandia’s International’s quarterly Adviser Confidence Barometer research.
Adviser confidence levels in their local economies scored 5.3 out of 10 – down from last quarter’s 6.2, whilst the consensus on the global economy dropped from 5.4 out of 10 to an average of 5.
The most upbeat on their local economies were Singapore-based advisers with a score of 6.7, whilst advisers in the UK displayed the greatest nervousness with a below-average score of 4.6. However, respondents from the UK were the only ones to consider the outlook for the global economy more positive than the shape of their local market. All the other surveyed advisers displayed a stronger bias towards their local economies.
Just like last quarter, one third of offshore advisers see global contagion as the greatest economic threat to their local regions, while a combined 40% felt rising unemployment and inflation could have a more imminent detrimental impact.
As many as 55% of advisers – up from 37% last quarter, consider their clients more risk averse, whilst 47% reported a reluctance on their clients’ part to invest at all. The 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 Q4, 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.
However, 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, while 7% saw higher demand for lump sum investments.
Skandia said that perhaps the most significant encouraging finding was that the vast majority (97%) of respondents confirmed that their clients were riding out the storm, rather than trying to sell their investments and crystallise any losses.
The Offshore Adviser Confidence Barometer research was conducted by Skandia International and attracted responses from over 450 advisers from Hong Kong, Singapore, Dubai, UK, Europe, Africa and Latin America.