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Survey finds British investors need and want professional financial advice

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British investors worry most about their retirement according to a new survey. Some 66 per cent of investors in the UK are worried about their retirement but most remain unsure about their investments. 

Natixis Global Asset Management’s survey of 750 UK investors has found that 29 per cent of Britons have little or no knowledge of the income needed to live comfortably in retirement. Of those that do, only 22 per cent were confident that their current investment approach would meet their retirement savings goals.
 
 The survey found that 71 per cent of UK investors say retirement is their top investment aim, however 42 per cent have little or no knowledge of the annualised return on investments needed to reach their financial goals.
 
Investors recognise there are large, external threats and other, more personal issues that could have an impact on retirement finances with inflation and long-term care costs topping the list of threats to their financial wellbeing in retirement. However 44 per cent of investors are willing to take more risk than a year ago.
 
While three quarters, 76 per cent, of investors say it’s important to follow gut instincts when making investment decisions, many want a greater sense of security and guidance. Over half, at 65 per cent of UK investors worry about market shocks and yet feel powerless to protect their investments from the impact.
 
Some 52 per cent also struggle to avoid making emotional investment decisions when market shocks occur, while 30 per cent of British investors agree that they would have a better chance of reaching their objectives if they stopped making emotional investment decisions.
 
The survey found that 74 per cent of UK investors, including those who don’t consult with advisers, believe that getting professional advice is important in making investment decisions.
 
“This represents a huge opportunity for financial advisers to step in and help individuals understand how best to invest for their futures,” said Chris Jackson, Deputy CEO of Natixis Global Asset Management – International Distribution. “As the pension reforms start to hit home, we need to ensure investors are not only getting access to the investments they require, but also the education they need to understand how effective portfolio construction can help to better meet their retirement goals.”
 
 
The firm found that investors need help and education to match their financial aspirations and believes that the challenge for financial advisers is to deliver solutions for this new set of investor demands.
 
The survey found that while investors remain bullish on stocks this year, they’re open, even eager, to invest differently. 63 per cent agree that traditional approaches (a mix of stocks and bonds) to portfolio allocation aren’t the best ways to pursue returns.
 
In the UK, some 82 per cent of investors say they invest only in products they understand – less than half (44 per cent) say they understand alternatives yet 46 per cent still invest in alternatives (an increase of four percentage points in three years).
 
Confidence in alternatives is high with 83 per cent of UK investors who have an adviser saying they would consider alternatives if their adviser recommended them.
 
The survey found that investors are seeking new portfolio strategies that can help them: better insulate their portfolio from volatile markets 66 per cent; diversify portfolio risks (64 per cent); and generate new and reliable sources of income (63 per cent).
 
Despite concerns over the level of advice available, the survey found a high level of optimism among investors of all ages and asset levels. 72 per cent believe their portfolio will perform well in 2015, and many feel optimistic they will achieve better returns than 2014. More than half of investors believe market volatility undermines their ability to reach savings and retirement goals.
 
 Commenting on the findings, Jackson said, “Overall, given the recent changes to pensions, it is clear investors want and need more advice about where they are putting their money. Without a plan that incorporates individual risk appetite and personal benchmarks, the odds are diminished that investors will meet their goals and that is the greatest risk of all. It is therefore up to IFAs to help their clients develop personal benchmarks, which incorporate the levels of risk they are willing to take, and construct a suitable portfolio around this.”
 
 

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