As financial advisers know more than many other professions, confidence is an important part of our job. Whether it’s confidence in our own abilities to make the right choices or confidence our clients have in us to make the right decisions that affect their financial wellbeing. Either way with major economies struggling we need bagfuls of the stuff at the moment.
Unfortunately, it appears to be in short supply. Skandia International’s latest survey provides the evidence that financial advisers’ sentiment towards the state of the global economy turned negative sometime in Q2 across all regions surveyed, with confidence levels falling to a below average score of 4.9 out of 10, resulting in the lowest score recorded in the last 12 months in the company’s International Adviser Confidence Barometer.
The Eurozone debt crisis is the main culprit for our lack of confidence. After that, it seems we’ve lost confidence because of the continuing volatility and unpredictable behaviour of the global stock markets and are having to watch our clients become more risk averse than ever before. After that, the survey suggests our confidence has been shaken by economic growth across the globe being stalled further due to rising unemployment and ongoing government spending cuts.
Keep calm and carry on
The problem is if we as professionals lose confidence in the markets, it becomes a difficult ask to expect our clients to stay calm and carry on. Making rash financial decisions in the light of adverse economic news is not what we as advisers want our clients to do. Some of us have been around the block enough times to have witnessed the effect panic decisions have on pension and long term savings strategies.
Obviously a state of confidence is not some professional tool we can choose to pick up. But at the very least, we need to instil confidence in our clients that we are on top of the situation. It’s clear this economic nightmare is going to be around for some time, so we need to demonstrate to clients that we can guide them through the current financial storm. After all, confidence of trust from our clients goes to the very heart, not to say, survival, of our collective work and individual livelihoods.
In my view, the current economic backdrop means professional advisers are needed more than ever. While we may feel that as a profession we are bobbing around in a very small boat upon a very large unchartered sea – and let’s face it we probably are – we need to demonstrate we have the confidence to help our clients make some tough decisions. We need to demonstrate our value by taking clients by the hand and offering solutions, not burying our heads in the sand.
We may have lost confidence in the markets, but please let’s show we have not lost confidence in our own abilities.
