His comments come in the context of research from Natixis Global Asset Management, which indicated that advisers have been moving their exposure away from UK equities and into fixed income mandates as nervousness grows about the outlook for the UK as the deadline for leaving the European Union approaches.
Mr Dennehy said investors might want to reduce risk in their portfolios as they get older and move to an income rather than growth strategy and such a desire for income would typically provoke an investor to buy bonds.
He said: “As people get older they need a reliable source of growing income as their big priority – they can achieve this through good equity income funds, not through bonds.
"Older people and advisers need to change their mindset and focus on the reliability of the income stream not on the day to day volatility of the capital value.”
Mr Dennehy said investors buying fixed income assets as a diversifier away from equities are being imprudent as the valuations of both asset classes looks expensive, but there is a greater risk of liquidity drying up in bond markets.
The research from Naxitis found advisers are investing in US equities in portfolios designed to be higher risk, and withdrawing from UK equities.
What the research terms moderate risk funds have been deploying more capital into bonds and European equities.
The survey also found that advisers have been reducing their exposure to UK property funds, with negative flows into the sector in June.
Property fund managers were taken by surprise, not only by the result of the EU referendum on 23 June last year, but by the speed at which investors began pulling money out of their funds.
Many fund houses responded by suspending dealing on daily dealt property funds or applying temporary pricing adjustments, in order to meet demand for redemptions.
Gradually, the funds began re-opening and trading again but the incident served to highlight the liquidity issues surrounding these types of funds.
The suspensions also caught the attention of the Financial Conduct Authority (FCA), which issued the findings of its review into open-ended property funds in July this year.
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