HNW attitudes to advisers

The majority of UK investors say their adviser understands their attitude to risk, but only half believe he is helping them understand the full range of investment options, according to a survey from Natixis Global Asset Management.

HNW attitudes to advisers

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The study, conducted by CoreData Research on behalf of Natixis, asked 733 individual investors in the UK with at least £200,000 in investable assets about their attitude to risk, relationship with their adviser and understanding of alternative asset classes.

Natixis found that 63% of UK investors think their adviser understands their attitude to risk, while 60% think he clearly explains the relationship between risk and return of their investments.

Meanwhile, 55% of individual investors said a fear of losing money due to market volatility is the main influence limiting their investing and saving.

Commenting on investors’ perceptions around risk, Ed Farrington, managing director, global key accounts, at Natixis, said: “When you get close to two thirds feeling a certain way it is a good indication that there is a good understanding in the adviser community.

“Advisers do understand their attitude to risk and this is during a time when attitude is fluid and changing. So this is a strong indication in the quality of the advice.”

Focus on risk

Farrington said the relatively new focus on risk, played a role in the fact that more than one third of UK investors did not think their adviser understood their risk attitude.

“In the 1990s people would probably not be very sure of how to discuss risk at all, certainly in the past five years risk has taken a turn.”

Back in the bull market, there was not as much of a focus on potential for loss, but now two thirds of investors believe “the more risk they take, the more they could lose”, Natixis found.

Following the volatile market that have dominated post-financial crisis, predictability and capital protection are now key priorities among investors with 62% saying that if forced they would take safety over performance and the same proportion saying they “value stable and predictable returns more than ever before”.

Two-thirds of investors will only take on minimal investment risk, even if this means sacrificing returns.

The UK survey was part of a larger study of over 5,000 investors in 14 countries and Herve Guinamant, president and CEO of Natixis Global AM, said some striking similarities were found around the globe.

“Facing low rates, high correlations among asset classes, and fear of loss due to market volatility, investors the world over are worried about generating enough income in retirement. What investors want is a new approach that puts risk first and helps them build portfolios that can better withstand volatile market movements so they can stay invested and meet their savings goal,” he concluded.

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