Confidence now stands at 5.8 out of 10, “a slight fall compared to 6 out of 10” in the previous quarter, the UK-based international arm of Old Mutual Wealth reported.
The UK was described as the only region of those surveyed in which financial advisers’ confidence stayed level, at 5.9 this quarter and last, as confidence in all other regions slid.
Financial advisers in the UAE exhibited the greatest decline in their positive attitude, recording a drop to 5.8 from 7.1; those in Europe were second in the degree of their loss of confidence, relative to the other regions surveyed, the Skandia survey found.
Outlook for China less positive
When asked about their confidence in the Chinese economy rather than the global economy, the advisers surveyed also revealed a greater scepticism than they showed three months earlier, possibly reflecting a widespread impression that the country’s rapid economic growth spurt is beginning to slow.
Confidence fell from a total of 6.1 out of 10 last quarter to 5.8 out of 10 this quarter. All regions reported a drop in confidence in the Chinese economy, with the largest drop coming from financial advisers in Singapore, where advisers expressed their degree of positive feeling about China to 5 out of 10, from 6.6.
As for their local economy, again, financial advisers in the UK seemed relatively optimistic compared with their colleagues in other regions surveyed, expressing their confidence at 5.8 out of 10, compared with 5.2 at the end of March.
Advisers in all the other regions surveyed reported a drop in their confidence in their local economy, with Singapore again showing the greatest drop, to 6.4 from 7.2.
Effects of QE tapering
James Millard, director of investments at Skandia, noted that the declines in adviser confidence reflected a number of factors, including the "recent difficulties in Asia" as well as the effects of the awareness that the Fed intends to ease up on its policy of quantitative easing.
"The abundant liquidity that had poured into the region following the global financial crisis is becoming increasingly scarce, and advisers and investors are becoming increasingly cautious," Millard said.
"A stronger USD on the back of potential tapering of quantitative easing [by] the Fed and growing expectations of a US economic recovery has drained liquidity from emerging markets and commodities.
"Asian markets, particularly China, have suffered relatively."
Further compounding factors, he went on, include an overstretched banking system and the slowing economic growth in China, while the depreciation of the yen "has also made non-Japanese exporters in Asia less competitive, in a time of lacklustre global economic growth".
The Skandia survey, which Skandia International refers to as its Quarterly International Adviser Confidence Barometer, was compiled from responses received from 349 advisers from Hong Kong, Singapore, the UAE, the UK, Europe, Africa and Latin America.
Old Mutual Wealth, the parent of Skandia and Skandia International, is in turn a part of Old Mutual plc, the London-based, FTSE 100-listed financial services giant.
Adviser confidence in global economy
true
In the first quarter of 2013, the Skandia researchers found that financial advisers in Singapore were the only ones whose confidence in the global economy slid. To see that report, click here.
The findings come from Skandia International’s quarterly adviser confidence barometer, which measures confidence levels among advisers based across Europe, the United Arab Emirates and in Hong Kong and Singapore.
