The survey found confidence has increased 13% since the last quarter of 2011, with advisers rating their confidence as 5.2 out of 10 (10 being the most confident) up from 4.6 in Q4 last year.
While the European debt crisis remains the biggest cause of concern for most advisers, many respondents also said unemployment and government spending cuts are the biggest threats to the UK economy. The survey revealed a near 6% jump in the number of people citing unemployment as their biggest fear to put it at second place with 15%, while ‘government spending cuts’ is up from 5.5% to 8.1%.
Not surprisingly, emerging markets continue to be the sector most advisers believe will offer the best investment returns over the coming twelve months, with 30% of the votes. However, there has been a big jump to second place, with North American equities taking 16% of the votes, which is nearly four times greater than it was in Q4 at 4.3%. The traditional safe haven, gold, saw the biggest fall – perhaps as an indication of slightly increased adviser confidence – halving from 12% in the last quarter to just 6% this quarter.
Peter Mann, chief executive of Skandia UK, said: “Financial advisers are a good barometer when it comes to market sentiment. The 13% improvement in adviser confidence is great news, and we could be seeing the first green shoots of renewed optimism. Market volatility and uncertainty can often bring opportunities, and advisers should focus on ways to position themselves and their clients for any potential market bounce back.
“High unemployment is clearly a growing area of concern among advisers, and unfortunately the recent unemployment report will do little to dampen those fears. The latest inflation figures show a small decline, perhaps an early sign of the effect Government spending cuts and high unemployment is having on consumer spending.”
