Investment indecision an opportunity for financial advisers

Andy Zanelli, head of retirement planning, AXA Wealth, believes the findings highlight significant opportunities for advisers.

He said:

“AXA’s latest Big Money Index highlights a stagnancy in the investment decision making of many consumers, particularly young professionals, with more than half (55%) of this demographic, indicating that they don’t know where to put their money. This is hugely concerning given that this group has the biggest scope for wealth creation and the capacity to put into place a portfolio of investments now that could secure their future financial horizons.

“Consideration of wider options is important and advice is essential to ensure consumers’ hard earned money is working for them, and working well. For advisers the opportunity is evident. Given that it is young professionals who are most in the dark, advisers need to think carefully about how they engage with them. The relationship that develops would diversify the adviser client base and can be highly valuable as advisers take the consumer through several significant life stages. It could be a mutually advantageous and long-term partnership with significant benefits for consumers and advisers.

“Interestingly, against the backdrop of the ‘flight to cash’ mentality of recent times, two in five (39%) consumers said it was unlikely they would move their savings to elicit a better return in the next three months. They could be missing a trick. While the UK savings market has suffered in recent years, with high inflation and record low interest rates eroding the income of consumers up and down the country, it simply doesn’t pay to sit on cash.

“Research has shown that income generated from a one year bank deposit of £100,000 would have generated income of £5,745 in 2007, while today it would only generate £820. This illustrates that cash is not always the right option and consumers could benefit from taking a different approach to money matters. Financial advisers are in a position to help investors diversify their investment strategy in line with their attitude to risk and make the most of the money they have.”