Some 77% of advisers expect equities to rise over 12 months but only 43% of non-advised investors think the same highlighting a sizeable confidence gap, research by Scottish Widows has revealed.
The Scottish Widows Investor Confidence Barometer has shown that the confidence gap on stock markets between advisers and investors remains high on a five-year review.
Cautious investors
Further data from the pension provider has shown that high interest rates, mortgage rates, food and energy prices are fuelling investor uncertainty.
Of those surveyed, 63% of non-advised investors and 62% of advised now believe inflation will remain an ongoing feature for the next few years.
The firm has also reported that there is evidence to suggest that investor pessimism has been damaging to returns with 28% of surveyed advised clients reporting that they initiated an increase in cash holdings with their adviser.
To read more on this topic, visit: Advisers responsible for closing advice gap, survey reveals
Barry MacLennan, chief executive at Embark Investments, said: “It’s understandable investor confidence has taken a knock given the current economic and geopolitical uncertainties. However, stock markets typically look through the gloom, so it can be damaging in the long run to take portfolio risk off the table due to short-term, negative news.
“With investors admitting that ‘taking too little risk’ has been one of their biggest mistakes, a key part of the adviser role is to keep their clients on track from a risk-reward perspective, by focusing on long-term outcomes.”
