Just 10 per cent of investors have turned to a financial adviser since the coronavirus crisis hit markets despite most consumers believing it will take “a number of years” for their portfolios to recover, according to new research.
Data from wealth manager Bancroft Wealth showed one in 10 investors had contacted a financial adviser over the past three months and most (58 per cent) had taken no action to address their investments.
Bancroft polled 1,000 investors — with an average of £190,000 investable assets — in early June and found the lack of a request for help came despite the fact investors were cautious, if not pessimistic, about their portfolios’ recovery.
When markets are relentlessly rising, it is easy to assume you don’t need help. The value of a well-managed or advised portfolio really comes into perspective during more challenging periodsJason Hollands, managing director at TilneySome 21 per cent believed the market would recover within a year, while 30 per cent said their investments would take at least five years to get back to their pre-pandemic values.
Almost one in 10 (9 per cent) of those polled said the recovery would take at least 10 years, while a similar amount (8 per cent) were concerned their investments would never recover.
The research showed some investors had been affected by the crisis more than others. Nearly half (49 per cent) of those polled reported that the value of their investments had fallen. For those investors, the average loss was 19 per cent.
About a quarter of respondents said they had seen little change to their returns, 15 per cent were unsure and 13 per cent said they had seen an increase in value.
Keir Ashman, pensions and investments specialist at Bancroft Wealth, said: “It’s hardly surprising that investors have had their confidence rocked by Covid-19 and the knock on effect that lockdown continues to have on the economy.
“It’s also clear from our survey that investors have experienced a great deal of turmoil with their personal wealth in recent months, leaving many unsure what to think, how to feel or what to do.”
Mr Ashman urged the 90 per cent of investors who had not spoken to a financial adviser to do so “sooner rather than later”.
Jason Hollands, managing director at Tilney, said: “Sadly, the low take-up of financial advice is a reflection of widespread reluctance to pay for professional help, something not helped by an obsession with fees.
“When markets are relentlessly rising, it is easy to assume you don’t need help and you should just save fees by investing in a few trackers. The value of a well-managed or advised portfolio really comes into perspective during more challenging periods.”
Ian Porter, director at Roberts Clifford Wealth Management, agreed, adding the lack of consumers turning to advice was “poor” but “not surprising”.
Mr Porter also thought the large losses shown in the research reflected a lack of advice.
He said: “The majority of my client’s portfolios have already recovered most of the falls from March.
“[The losses] could be reflective of the prevalence of low cost trackers in workplace pensions or just widespread investments in poor quality funds. Advice would fix that.”
Mr Hollands agreed: “I suspect this survey reveals many investors are not up to speed with where markets are at and are unaware of the strength of the liquidity driven rally.
“They are probably being unduly swayed in their pessimism by the very negative economic and corporate news headlines. This will be compounded by the fact that so few are in touch with an adviser, to keep them abreast of the situation.”
imogen.tew@ft.com
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