Many financial advisers are of such "youthful vintage" they don’t understand the current risks faced by the UK economy, according to veteran fund manager Adrian Frost.
Mr Frost jointly runs the Artemis Income fund, and has been at the helm of the £6.4bn mandate since 2002.
In his latest update to investors, he suggested financial advisers may be underestimating what he argues is a fairly negative forecast for the UK.
"There are many advisers who suggest a negative outlook for the UK is 'in the price'.
"They may be right.
"Remember, however, that these advisers are often of such youthful vintage that they have only ever known governments that favour a diet of free-market economics washed down with a glass of fiscal prudence.”
Mr Frost said he takes a more pessimistic view.
“For us, the most important consequence of the election was that our view on the outlook for the UK economy has cooled (it was never that hot)."
The Artemis Income fund has returned 27 per cent over the past three years, compared with 25 per cent for the average fund in the IA UK Equity Income sector in the same time period.
The fund manager’s comments come in the context of the International Monetary Fund (IMF) having this week cut its growth forecast for the UK economy.
At the same time an economist at Fathom Consulting said there is a greater than 50 per cent chance of a recession in the UK in the next twelve months.
Chris White, head of UK equities at Premier, is another who is cautious on the outlook for the UK economy.
He said: “It seems likely to me that, given the lack of consensus and clarity surrounding Brexit, the UK’s economic growth will wane….at least on a relative basis compared to other European countries."
Mr White continued, "It’s difficult to foresee substantial domestic or foreign investment in the UK given the uncertainty and existing overseas investors may reconsider their positions.
"The economy will get little help from consumers (unless consumer debt rises further) and the government is cautious about increasing expenditure despite the electorate’s concerns about austerity.
“Whilst this does not mean we are the new ‘sick man of Europe’, we should expect a more fallow period of economic growth over the next couple of years."
However while fund managers weigh up the prospects for the domestic investment landscape, advisers are more focused on the long term.
Claire Walsh, adviser at Horsham-based firm Aspect8, said she never tries to take a view on markets.
"My role as an adviser is to look at overall client needs and to encourage a diversified portfolio based on those needs.
"I do not take a view on markets nor do I encourage clients to try to time the market. I do not believe that is the role of an adviser."
david.thorpe@ft.com
