Talking Point 

How advisers are preparing for Brexit volatility

How advisers are preparing for Brexit volatility

Almost two-thirds of advisers believe a long-term outlook will best protect drawdown clients’ assets from possible turbulence in the market, according to the latest FTAdviser Talking Point poll.

The poll asked advisers to choose which four actions best described how they are helping clients in drawdown from the possibility of volatility after Britain leaves the EU on 29 March.

A total of 62 per cent said they were doing nothing different to prepare clients from possible ensuing market turbulence, while 19 per cent said they were arranging more client meetings.

A mere 13 per cent said they were moving more of clients' portfolio allocations into cash, and 6 per cent said they were advising clients to limit their pot withdrawals.

Jaskarn Pawar, chartered financial planner at Investor Profile, said he was encouraged by the fact that some 81 per cent of advisers were looking to maintain a long-term strategy throughout any expected turbulence. 

He said: "Moving to cash sounds risky at best, but a little bit like predicting the future at worst. 

"Why move to cash unless you know what is going to happen? If you know what is going to happen, how do you know?"

Similarly, Chris Justham, head of discretionary at 7IM, said it was reassuring the temptation to move clients fully into cash was "not luring more advisers into making a short-term emotional decision that disregards the longer-term plan".

Ideally, cash was already being utilised as part of a well-diversified portfolio, he pointed out.

He continued: "Providing a client’s portfolio is adequately diversified with no significant concentration in UK facing companies, one could argue that staying the course and keeping clients well-informed and reassured is the best course of action."

Helen Richardson, independent financial adviser at Ascot Lloyd, noted clients would be offered different styles of management and would themselves have different levels of involvement. 

She explained: "I have a mixture - some clients prefer more involvement and like to know what the fund managers are doing with assets, whereas others just prefer to leave us and the managers to it given that the portfolios are long term in nature anyway.

"Where drawdown is coming up over the shorter term we would be prepared and have a cash allocation ready in any case, irrespective of Brexit."

victoria.ticha@ft.com

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