The survey, which gathered responses from over 7,000 individuals worldwide, revealed that nearly three-quarters (73 per cent) of investors would prioritise safety over potential performance in their investment strategies, underscoring a widespread apprehension toward financial risk in the current climate.
Aside from market volatility, maintaining financial progress remains a critical concern for investors. The survey noted that 34 per cent of investors ranked tax liabilities high among their financial worries, a sentiment that advisors are keenly addressing. In fact, 74 per cent of advised investors globally view managing tax liability as central to their financial planning efforts. The timing aligns with heightened media coverage on taxation and the proximity of the financial year’s end, particularly within Australia.
Furthermore, the escalating cost of living has raised flags for investors, with two-thirds (66 per cent) of respondents indicating reduced savings due to increasing daily expenses. Meanwhile, inflation has noticeably affected the financial gains of about 59 per cent of investors, reducing their capital's value over time.
Notably, the survey carries insights into evolving expectations between clients and advisers concerning investment returns. Investors are now projecting an optimistic 7.3 per cent return above inflation for 2025, a drop from the previous year's 10.9 per cent. While clients remain "cautiously optimistic" about achieving long-term returns of 10.7 per cent above inflation, advisers suggest a more realistic target of 8.3 per cent.
These adjustments demonstrate a narrowing of expectations between advisers and investors, with the expectation gap tightening from 42 per cent in 2023 to 28 per cent in 2025. This alignment suggests a more harmonized understanding of realistic financial outcomes amid ongoing economic challenges.
Darren Pilbeam, Head of UK Sales at Natixis Investment Managers, commented on the findings, pointing out the profound impact of geopolitical instability, rising inflation, and increased costs on investor behaviour. He noted that as markets continue to grow in complexity, investors are increasingly seeking assurance from their advisers to navigate the financial landscape effectively.
