UK investment firms shift priorities amid market volatility

Published On: June 29, 2022Categories: Latest News2.1 min read

Almost half of UK financial professionals surveyed were concerned about market volatility, though few thought market slides would continue throughout the year

Finance professionals across the UK and Europe expect business growth of 5% over the next year, according to Natixis Investment Managers. This is despite bear market corrections in the US and the poor performance of other markets during H1 2022.

However, up to 72% of UK wealth managers, investment advisers, planners and broker dealers, are concerned about the investment impacts of geopolitical risk, while 68% are concerned about inflation.

Natixis Investment Managers’ 2022 Financial Professionals Survey spoke with 1050 financial professionals across the UK and Europe. In an interview with Investment Week, executive director of the Natixis Center for Investor Insight and report author Dave Goodsell said: There is a lot going on that is resetting the reality for financial professionals around the world.

We have had an incredible market run up and things have now changed. Financial professionals have to think differently about how investments should be structured and how their assumptions about markets impact decisions, he said.

Almost half of UK financial professionals surveyed were concerned about market volatility, though few thought market slides would continue throughout the year, with many anticipating 4.7% gains for the FTSE 100.

Use of alternatives was also on the rise with 64% of UK respondents revealing current market conditions would make investment in infrastructure, private assets and commodities more attractive, according to Natixis.

You need more than markets to grow your business, said Goodsell. Our research points to some pretty substantial growth goals from financial professionals around the world. In Europe and the UK, advisers are looking to see annualised growth of 10% over the next three years, and they undercut that on a one year basis.

They have to look at making this up, by bringing in new assets and clients, he said.

According to head of Darren Pilbeam, head of UK sales at Natixis IM, when it comes to inflation and expected returns, there is a disconnect between advisor expectations and expectations of end clients.

Over the long term, UK advisors’ return expectations are just over 6% above inflation. That is a large number to start with. Client expectations were even higher at 7.3% above inflation, and these were low compared to the rest of the world, where in many cases, there were double digit expectations above inflation, he said.

Goodsell explains firms will need to look beyond asset allocation to add value, honing in on helping clients achieve broader goals.

Over half of respondents revealed they segmented prospects by age to recruit clients, with 93% of UK firms targeting those aged 50-60, and 86% focusing on those aged 60-65.

Referrals were an imperative in this process, Natixis revealed, with 91% of UK respondents mentioning it in their processes.

About the Author: Jonathan Adams

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