Now more than ever, expertise and experience of advisors is 'crucial,' finds survey
A newly released global study of investors reaffirms the value of financial advice in today’s uncertain times.
The Schroders Global Investor Study 2022 showed that because of the uncertain markets, high inflation, and rising interest rates, investors are now more likely to seek advice from financial advisors.
Two out of five investors (39%) are more inclined to speak with a financial advisor as interest rates continue to climb, according to the Schroders poll of more than 23,000 investors from 33 countries worldwide.
Moreover, compared to six months previously, investors who considered themselves to be more knowledgeable were also more inclined to seek out the assistance of an active manager.
Compared to 2021, when returns were expected to be 11.31%, investors now expect returns to be 11.37%. Even while it was still a gain over the year prior, this growth of 0.06 percentage points was the smallest since 2018.
In fact, investor expectations have grown on average by 0.23 percentage points since 2017, which shows that as inflation and interest rates have begun to climb, people's return expectations are now expanding at a slower rate than in the past.
It's interesting to note that 80% of investors who considered themselves to be "experts" in the field of investing said they had already adjusted their investment plans in reaction to rising inflation. The average person has this percentage at 55%.
Given a more uncertain picture, many investors are preferring to proceed cautiously; 43% are more likely to increase their savings than their spending.
The diversification of their portfolios is something that an additional 42% of investors are aiming to increase.
A large market event's impact may be lessened by spread-out exposures, according to 60% of investors, who considered their investments were sufficiently diversified.
Nearly a quarter of the respondents (24% and 23%, respectively) named government bonds and cash as the least appealing asset classes, reflecting a decline in interest in investments that may be hampered by rising interest rates.
However, 48% of investors thought actively managed funds were more attractive, indicating the value they place on professional counsel during trying times.
Two-fifths of the respondents also believed private assets to be more attractive, while 43% of investors thought the same about digital assets.
The demand for thematic investments has increased among investors as well, with 57% eager to allocate to technology.
Similarly, electric vehicles and sustainability were important themes, with 52% and 46% of investors perceiving these to be more alluring, respectively.
