Financial planners working with AXA claim most of their clients are not panicking about the recent downturn in markets but are concerned about what sort of market conditions will prevail in the immediate future, the firm’s chief investment officer Mark Dutton has revealed.
“There are questions [from clients] and they are really around things that uncertainty and anxiety are being raised about. Things like are we headed for a recession which will force the market into even lower levels,” Dutton said.
Clients have been more focused on the recent economic events from the point of view of borrowers rather than investors monitoring elements like interest rates, according to Dutton.
“Those clients that are talking about their financial plans holistically – their exposure to debt, exposure to borrowing for housing, their exposure to borrowing for their gearing investment strategies is certainly a topic that quite appropriately is being talked about quite a lot,” he said.
Following on from this clients are also taking the opportunity to get a better understanding of how their portfolio is currently constructed in terms of how well diversified they are and whether or not they have any exposure to some of the poorer quality investments.
But while clients are looking to gain a better understanding of the elements and processes involved with their investments they are not yet willing to start rebalancing their portfolios.
This process was likely to happen more gradually, Dutton predicted.
“A logical compromise, and not a bad way to think about it, would be to say ‘I should be rebalancing, I don’t want to be overweight in cash and conservative assets classes in my long-term strategic retirement plan. But I’m a bit wary about the market so how about we diversify over time as well as all over all of these other dimensions and average in the entry points’,” he said.
