Financial Planning
Financial advisers evolving as wealth managers: Report

Financial planners are increasingly repositioning themselves as asset allocators instead of stock pickers, according to Investment Trends.

The research firm's survey of nearly 1000 financial planners and stockbrokers found about one in four (25%) call themselves wealth managers, while 14% like to be known as investment managers.

The 2018 Margin Lending Adviser Report also found that as high-net-worth investors demand more than just domestic equities advice from stockbrokers, only 33% of brokers will position themselves as stockbrokers to clients in 12 months' time.

The research also found advisers and stockbrokers anticipate significant changes to the products they recommend.

This is a move toward ETFs and managed accounts - solutions that provide diversification, low cost, and require less admin and paperwork, the report said.

"We expect this trend to persist as advisers increasingly prioritise diversification and capital preservation when selecting investments for clients," Investment Trends analyst John Carver said.

The vast majority of stockbrokers (73%) and financial planners (83%) believe gearing is a key investment strategy in clients' portfolios, but is ideally suited to those with assets over $1 million (HNWs); between $250,000 and $1 million in investable assets (affluent clients); and accumulators aged 35-49.

Outside of property, the most popular form of gearing is in shares and funds.

"Despite many advisers recognising the benefits of gearing, enthusiasm for products such as margin lending has declined," Carver said.

"Heightened market volatility has certainly held back many advisers from increasing their gearing advice, and instead we are observing a greater proportion of clients themselves prompting their adviser to use these products in the first place."

Read more: Investment TrendsJohn Carver
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