Investors’ appetite for risk is on the decline, financial advisers report

15th March 2016

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Over half (52%) of UK financial advisers say their clients’ appetite for risk has decreased over the last 12 months, with 8% saying the drop has been ‘dramatic’, according to new research by rplan.co.uk the online investment platform.

Three in 10 advisers (29%) believe the number of UK people using investment ISAs this year will fall, with 44% saying it will stay the same and 18% seeing an increase.

Half (50%) of advisers believe more people would save or invest if the ISA allowance was raised, although 41% believe the number would stay about the same.

Over a third of advisers (35%) say the main reason UK people will not invest this year is because they are worried about volatility on financial markets while 35% say it is because of a lack of spare cash. The main reason people will invest this ISA season is because interest rates are so low, according to 41%.

More than half (55%) of advisers say UK equities are the most attractive asset class at the moment, versus 39% citing European equities and 25% US equities. Only 7% say cash is the most attractive option.

Stuart Dyer, rplan’s chief investment officer, says: “No doubt the volatility in January and Brexit vote later this year are factors in making investors more cautious this year, although there are other issues around the world that need to be considered.

“But investing has never been easy and there have always been risks facing investors. They should use this year’s ISA allowance before they lose it and either invest in a balanced portfolio with a long term view of five years or more, or take advantage of the new flexible ISA rules and put money into cash now and invest later.”

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