Economic Unrest Spurs Increased Reliance on Financial Advisers

1

The survey, which gathered responses from over 7,000 individuals worldwide, revealed that nearly three-quarters (73 per cent) of investors would prioritise safety over potential performance in their investment strategies, underscoring a widespread apprehension toward financial risk in the current climate.

Aside from market volatility, maintaining financial progress remains a critical concern for investors. The survey noted that 34 per cent of investors ranked tax liabilities high among their financial worries, a sentiment that advisors are keenly addressing. In fact, 74 per cent of advised investors globally view managing tax liability as central to their financial planning efforts. The timing aligns with heightened media coverage on taxation and the proximity of the financial year’s end, particularly within Australia.

Furthermore, the escalating cost of living has raised flags for investors, with two-thirds (66 per cent) of respondents indicating reduced savings due to increasing daily expenses. Meanwhile, inflation has noticeably affected the financial gains of about 59 per cent of investors, reducing their capital's value over time.

Notably, the survey carries insights into evolving expectations between clients and advisers concerning investment returns. Investors are now projecting an optimistic 7.3 per cent return above inflation for 2025, a drop from the previous year's 10.9 per cent. While clients remain "cautiously optimistic" about achieving long-term returns of 10.7 per cent above inflation, advisers suggest a more realistic target of 8.3 per cent.

These adjustments demonstrate a narrowing of expectations between advisers and investors, with the expectation gap tightening from 42 per cent in 2023 to 28 per cent in 2025. This alignment suggests a more harmonized understanding of realistic financial outcomes amid ongoing economic challenges.

Darren Pilbeam, Head of UK Sales at Natixis Investment Managers, commented on the findings, pointing out the profound impact of geopolitical instability, rising inflation, and increased costs on investor behaviour. He noted that as markets continue to grow in complexity, investors are increasingly seeking assurance from their advisers to navigate the financial landscape effectively.

Published:Friday, 20th Jun 2025
Source: Paige Estritori

Share this news item:

Finance News

Clear

Increasing Number of Qualified Financial Advisers Opt Out of Practice 11 Jul 2025: Paige Estritori Recent analysis from WealthData indicates a growing trend among financial advisers in Australia, where a significant portion of those who have successfully passed the financial adviser exam are opting not to practice. As of now, 5,096 individuals, representing 33.31% of active advisers, have chosen not to proceed into practice after passing the exam—up from 28.36% a year prior. - read more

Melbourne's Housing Market: A Prime Opportunity For Buyers 11 Jul 2025: Paige Estritori The Reserve Bank of Australia (RBA) recently surprised many by maintaining the interest rate at 3.85%, against expectations of a cut. This decision is seen as a measure to continue moderating inflation, but it simultaneously delays potential spikes in the housing market, providing a favorable window for prospective homebuyers. In particular, Melbourne's current market presents significant value, offering a promising opportunity for those looking to enter the property market. - read more

Improving EOFY Planning: The Call for ATO Portal Access for Advisers 09 Jul 2025: Paige Estritori In a recent discussion, James O'Reilly, Director and Financial Planner at Northeast Wealth, underscored the benefits that could come from granting financial advisers access to the Australian Taxation Office (ATO) portal. Speaking on The ifa Show, O'Reilly proposed that this access would significantly simplify the services financial advisers provide to clients, particularly at tax time and the end of the financial year (EOFY). - read more

RBA Holds Rates Steady, Shocking Markets and Shifting Economic Expectations 09 Jul 2025: Paige Estritori The Reserve Bank of Australia (RBA) has decided to keep the official cash rate steady at 3.85%, taking many by surprise after expectations of a 25-basis-point cut had built up in financial circles. This unexpected move comes amid recent data indicating easing inflation and weaker than anticipated economic growth, conflicting with prior predictions of a cut. - read more

RBA to Continue Interest Rate Cuts Amid High Unemployment 08 Jul 2025: Paige Estritori The Reserve Bank of Australia (RBA) is anticipated to maintain its trajectory of incremental interest rate reductions, according to insights from leading financial analysts at ANZ. Recent data from the ANZ-Indeed Australian Job Ads series revealed a rise from 114.8 in May to 116.9 in June, suggesting a potential rebound in job advertisements after previous declines. Despite a stable unemployment rate and hours-based underutilisation rate since mid-2024, the Australian labour market remains strained. - read more