Investors are increasingly turning to financial advisers amid concerns about the impact of the ongoing economic instability on their long-term investment goals, analysis from Natixis Investment Managers (IM) has shown.

Its survey of individual investors with more than $100,000 in investible assets found that 69 per cent of those in the UK were worried about the impact of instability on their finances.

As a result, nearly three-quarters (73 per cent) of global investors would now choose safety over performance for their investments, with 72 per cent concerned that markets will become more volatile going forward.

Natixis IM highlighted that investors were increasingly looking for clarity and the perceived value of professional advice remained high, with those in the UK now most likely to trust their adviser (91 per cent) when it came to making investment decisions.

Financial concerns

When asked about their top financial concerns, 51 per cent cited inflation, with 58 per cent of UK investors saying they were saving less due to rising prices and 52 per cent stating that inflation had eroded their gains.

This has resulted in 36 per cent of UK investors finding it more difficult to reach their long-term goals.

Meanwhile, 40 per cent of investors in the UK cited taxes as a financial concern, with 83 per cent of advised UK investors saying that managing tax liability was a key aspect of financial planning with their adviser.

Performance

While global investors have moderated their return expectations this year, most expected they would be able to generate returns of 10.7 per cent over the long term.

However, these expectations were seen as overly ambitious by financial advisers, who anticipated returns of around 8.3 per cent.

Only 56 per cent of UK investors felt comfortable with taking the necessary risks to pursue higher returns.

Investors were also starting to look more closely at their current investment strategies, as 42 per cent in the UK were worried that if the Magnificent Seven faltered, it would have an outsized negative impact on their portfolios.

Amid unstable performance in public markets, 47 per cent of UK investors were becoming increasingly interested in private assets, while 37 per cent said they felt they were missing out on the best opportunities by limiting themselves to public markets.

Although 79 per cent of wealth managers felt AI had the potential to accelerate earnings over the next decade, 62 per cent of UK investors believed AI was a “bubble waiting to burst”.

Turning to advisers

In light of the ongoing uncertainty, UK investors were seeking support with their retirement income planning (54 per cent) and financial planning services (54 per cent), alongside their portfolio strategy.

Natixis IM noted that many individuals globally wanted a more personal approach.

While 52 per cent of wealth managers earlier this year said they were concerned that AI was helping to make robo-advice a meaningful competitive threat, personal aspects continued to be prioritised in an adviser relationship: 33 per cent said that they found it valuable when their adviser understood their unique circumstances and 31 per cent also wanted someone who will just listen to them.

Only 40 per cent trusted algorithms and AI to support their investment decisions, while just 17 per cent trusted social media posts they read when making decisions.

“Ongoing geopolitical uncertainty, inflation and climbing prices are all causing investors to adjust their return expectations and think carefully about how to maximise their opportunity set,” stated Natixis IM head of UK sales, Darren Pilbeam.

“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.”

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