As investors battle against inflation, market volatility and other economic challenges, a survey from Natixis Investment Managers, conducted by CoreData Research, found that investors are most likely to trust their financial adviser (91 per cent) when it comes to making investment decisions.
Based on responses from more than 7,000 individuals globally, nearly three-quarters (73 per cent) of investors say they would choose safety over performance, highlighting the pervasive sense of fear among investors.
Though, it isn’t just volatility causing concern. According to the findings, investors are also worried about maintaining the progress they had been making on building their finances.
For example, a third of investors (34 per cent) ranked taxes third among their financial fears, a feeling that is reflected in what clients are asking for from their advisers, with around three-quarters (74 per cent) of advised investors globally indicating that managing tax liability is a key aspect of financial planning with their adviser.
However, with discussions around taxes splashed across mainstream media, as well as the end of financial year being so close, it is no wonder that taxes would be top of mind, at least among Australians.
The cost of living also proved a point of concern among investors, with two-thirds (66 per cent) explaining that they are currently saving less as a result of rising everyday prices, meanwhile around six in 10 (59 per cent) said inflation had eroded their gains.
Notably, the survey also found that client and adviser expectations regarding potential returns have shifted closer together as investors concede to more conservative predictions amid ongoing economic turmoil.
At this time, investors are expecting to generate 7.3 per cent above inflation for 2025, making a significant drop from the 10.9 per cent returns reported last year.
Though, the firm said investors remain “cautiously optimistic” for the future with the expectation that they will achieve returns of 10.7 per cent above inflation over the long-term, indicating that while short-term hopes have been somewhat dampened, this is not reflected in their predictions for the future.
In response, advisers reportedly deemed these long-term expectations as “overly ambitious”, suggesting that 8.3 per cent would be a more attainable goal.
Even so, this marked a significant reduction in the expectations between the two groups from a 42 per cent gap in 2023 to 28 per cent in 2025.
Speaking on the findings, Natixis Investment Managers head of UK sales Darren Pilbeam noted the impact geopolitical uncertainty, inflation and climbing prices are having on investors and their behaviours.
“With markets growing ever more complicated and investment choices more complex, investors are looking for reassurance. As a result, they are turning to their adviser to provide guidance on what to do next,” Pilbeam said.
