Financial Advisers Help Clients Navigate Geopolitical and Market Uncertainty
Viridian Advisory conducted a poll of its adviser network which covered 41 financial advice practices and the views of over 100 financial advisers. The survey conducted sought to understand the repercussions of global geopolitical events on financial advisers and their clients’ investment decisions and highlighted the unwavering resilience of Australian investors.
The poll reinforced the critical need for augmented support for financial advisers navigating ongoing geopolitical influences. Notably, 73% of advisers agreed additional support is a necessity to effectively communicate and educate clients about the potential implications of ongoing geopolitical tensions.
While economic concerns persist, a notable revelation surfaced: 56% of adviser respondents reported no client inquiries concerning the economic climate. Similarly, financial advisers highlighted that sentiments among clients remained stable, with 55% of advisers expressing unchanged or neutral bearish perspectives, while 41% highlighted their clients exhibited a more pessimistic outlook.
During times of crisis, investors can face heightened stress which can cause knee-jerk reactions that impact their investment strategies.
Amid looming global recession prospects, rising interest rates, and geopolitical conflicts, Australians have turned to financial advisers for personal guidance and reassurance along with wealth creation strategies.
Brett Arnol, General Manager of Viridian Advisory, emphasised that financial advice transcends mere investments; it’s a cornerstone for clients’ overall well-being and financial security.
“During geopolitical tensions, there’s often a surge in uncertainty triggering potential stock sell-offs. Yet, within our network, our clients remain steadfast,” Arnol observed. “Our clients are oriented toward long-term investments, a stance reinforced by the support our advisors provide. However, amidst this volatile landscape of uncertainty, market fluctuations, and escalating inflation and interest rates, there’s an evident need for additional support.”
“It’s crucial for financial advisers to step in as coaches, guiding clients to maintain focus on their long-term goals and avoid rash decisions prompted by sudden market shocks.
Financial advisers have assumed an increasingly pivotal role, extending their support beyond conventional financial planning practices”, said Mr Arnol.
Financial advisers serve as crisis interveners, not only offering guidance on investments but also playing a pivotal role in assuring clients during tumultuous times. Arnol highlighted this broader role, recognising the complexity advisers face as they help clients navigate multifaceted crises, providing support and devising strategies to buffer against future uncertainties.
Arnol said Viridian Advisory draws heavily on Viridian Financial Group’s in-house investment expertise. Advisers receive the latest market commentary, videos and corresponding strategies to help them explain geo-political trends and issues, as well as local economic trends.
Cash rates to be key driver of 2024 market outlook
Piers Bolger, CIO of Viridian Financial Group, highlighted the investment environment in 2024 will be likely dominated by cash rates, “While geopolitical risks along with ongoing military conflict will continue to impact financial markets, our key focus as we head into 2024 and the one that we believe will have the most significant impact will be the outlook for cash rates and by association inflationary expectations and the direction of bond yields.
The moves by central banks over the last 18 months to curb inflationary pressures have resulted in the most substantial uplift in cash rate history across many markets.
“It is clear central banks are now closer to finishing with rate tightening than they were at the beginning of 2023. This is fundamentally positive for multiple asset classes – equities, bonds, property, real assets – in our view, and we believe this will translate into higher, more synchronised investment performance across financial markets through 2024”, said Mr Bolger.
Viridian Advisory remains unwavering in its commitment to providing comprehensive support to financial advisers and clients, guiding them through the ever-evolving financial landscape amid this humanitarian crisis.
