Retirement and investment confidence gap grows
Some new research has found a growing gap in the confidence between financial planners and investors regarding prospects for retirement and equity investments.
The gap, which has grown since March this year, was presented in the latest Embark Investor Confidence Barometer.
The survey spoke to 1,000 people made up of 250 advised investors, 506 non-advised investors, and 252 financial planners.
The research found that 25% of planners were confident that most of their clients would achieve their retirement goals. The previous barometer recorded this confidence level at 34%.
Confidence in retirement plans also fell among advised investors, from 78% in March to 72% in October.
According to Embark, planners are becoming more pessimistic about the retirement prospects of their clients at a faster rate than their clients.
On equity investments, planners were more confident than advised investors, with 62% of planners bullish compared to 40% of advised investors.
In the last survey, the respective proportion of bullish planners was 57%, compared to 61% of advised investors.
Non-advised investors were even more pessimistic about the outlook for equity investors, with only 30% expecting a rise in the next twelve months, down from 48% in March.
Ranila Ravi-Burslem, intermediary distribution director at Embark, said:
“It has been a challenging year for investors, but this is the time when the benefits of having an planner come to the fore, and we see that clearly in these results.
“Advised clients have greater clarity on how much money they need to retire than unadvised investors, and they have greater confidence that they will achieve their retirement plans.”
Embark noted that it is not surprising that confidence levels have decreased due to the current macroeconomic situation, but the reasons for the widening gaps still need to be clarified.
In previous surveys, Embark has suggested that communication challenges are one reason for the confidence gap between planners and investors.
“Advised client investment confidence has also held up relatively better and, thanks to the experience of their planners, advised clients are more likely to take advantage of the more reasonable stock valuations that current market corrections create.
“This is a testament to the work that planners do to prepare their clients for market drawdowns and ensure they have the willpower to stay the course with their investments.”
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