INVESTMENTS & PENSIONS
Schroders 2023
UK Financial Adviser Annual Survey
Adviser Report
Marketing material for professional clients only
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Reassurance
1 . CASH DISCUSSIONS
95 % of advisers are having conversations about long-term investing vs cash deposits . The question of ‘ should I invest in cash ?’ is not straightforward and this is an area where advisers can provide real value to clients . Advisers can help to ensure that their clients ’ money is deployed in the right place to meet their long-term goals and that clients do not miss out on potential opportunities as markets rebound . Schroders has crunched the numbers , reviewing historic returns on cash and stock market investments over a range of timeframes extracted from 96 years ’ data . This shows that the likelihood of cash savings beating inflation has been about 60:40 for the majority of all timeframes . In contrast , for every 20-year timeframe in the past 96 years , equities have delivered inflation-beating returns . 1
2 . PRESERVING CAPITAL
Advised clients continue to identify capital preservation as their key financial priority and have less of a focus on inflation and interest rates . Many advised clients are in or near retirement , the stage in life when preserving a pension pot and other assets to fund later life is of particular importance . As many are likely to be mortgage free it makes sense that interest rates are seen as less of a concern .
3 . COST OF LIVING CRISIS
89 % of advisers report that they have adjusted some of their client plans due to the cost of living crisis . The key reason is rising household expenses . 35 % of advisers further report that some of their clients have stopped or reduced pension contributions . This is a concern and advisers can again add significant value through ensuring clients understand the long-term impact of making changes to their pension contributions and helping them generate additional income where needed in the most tax efficient way . For those clients who are adjusting plans to help their wider family , considerations as whether these are gifts or loans is another area that might need careful financial planning and advice .
1
Stocks represented by Ibbotson © SBBI © US Large-Cap Stocks , cash by Ibbotson © SBBI © US ( 30-day ) Treasury Bills . Data January 1926-December 2022 . Source : Morningstar Direct , accessed via CFA Institute and Schroders .
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