2 in 3 clients worried about investment volatility

Clients say they are more focused on the present turmoil faced by the economy than long-term planning issues, according to a survey of advisers by Canada Life.

A fifth (22%) of financial advisers surveyed cited inflation as their clients’ main concern.

Clients were less concerned about having sufficient retirement income (9%) and intergenerational wealth planning (3%).

Shelley Greenwood, head of investment proposition wealth at Canada Life, said: “Given both the constant headlines and the ups and downs of global markets over the last few months, it makes sense that investment performance is the top concern for clients. While this anxiety often focuses on the immediate pressures of the economy, it’s important to remember that retirement horizons can stretch for decades into the future.

“Financial Planning in retirement can be complex and must be personal – plans should be able to ride fluctuations in the markets, and be resilient to the economic headwinds we are currently facing. Bumpy markets can wreak havoc on those taking money out of their investments as a result of ‘pound-cost ravaging’, selling investments during dips to generate income.”

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Canada Life surveyed 159 financial advisers during roadshow events in September and October.

Earlier this year, 66% of our readers taking part in the Financial Planning Today ‘Financial Planning Profession’ Survey said that clients had contacted them in the past year to talk about concerns about their money or the economy.

Concerns shared by clients were overwhelmingly focused on inflation, stock market volatility and concerns about coping with the rising cost of living. 

A recent study on the impact of the forthcoming new FCA Consumer Duty by wealth consultancy NextWealth warned, however, that advisers may be too focused on investment performance.

NextWealth surveyed more than 400 financial advisers in the summer about how they document their value to clients. Some 73% said they used clients’ portfolio performance as their main measure. 

The next most common evidence sent to clients to prove value was milestones against client goals and objectives, reported by just under half of advisers.

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