News and Analysis | Written by Casey Goodwin, Head of Paraplanning, 15 December 2022

The value of good advice

Amidst market volatility, high inflation and rising interest rates, uncertainty is rife amongst investors in the UK. The challenging economic situation has had a direct impact on investor behaviour, with many seeking expert investment management.

The Schroders Global Investor Survey 2022 has been released this week, with some interesting findings about how people are navigating these troubled economic conditions.

The survey – of almost 24,000 investors globally – found that the majority of UK investors have changed their investment strategy growing economic uncertainty. More than two-thirds (67%) of UK investors have made changes to their portfolios, compared with 55% of investors globally.

With greater market volatility, investors also appear to be recognising the merits of “active” investing, where professional managers oversee a portfolio, above “passive” investments (with less buying and selling). Over half of UK respondents (54%) said they found actively managed funds more attractive, (six percentage points higher than the global average).

Interestingly, those surveyed that view themselves as ‘expert investors’ were more likely to seek professional advice and make changes to their portfolio than those who see themselves as ‘beginners’. These investors are recognising the importance of reviewing, managing and potentially diversifying their investments during times of uncertainty.

The same “expert” investors are also more likely to believe that investing sustainably is key to driving long-term returns, compared with their those who rate themselves as less knowledgeable. It’s really encouraging to see investors get to grips with sustainable investing and understand that not only does it help tackle the climate crisis, but it can result in better long-term returns, too.

We have certainly had some excellent conversations with our clients in recent times, reminding individuals of the importance of sticking to a robust financial plan in times of uncertainty and providing ongoing reassurance in how to navigate the current market and feel more secure about their financial future.

Looking ahead to 2023, the country faces a number of economic challenges and the prospect of “stagflation” (a period of high inflation, slowing growth and high unemployment). This could pose a significant challenge to the economy and UK stock, and Chancellor Jeremy Hunt has said that the economic situation will “get worse before it gets better”.

At times like this, the skills and experience of a professional financial adviser who can offer perspective and strategic advice can really help. As well as the financial benefits, it can also help to build financial resilience and help you to feel better prepared to navigate future financial challenges.

If you’re seeking some guidance, please do get in touch. We can provide you with advice that is tailored to you and your individual circumstances, helping you to stay on track towards your long-term goals and navigate the ups and downs of the economy along the way. It may just be the best investment you ever make!

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

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