18 January 2013
Financial adviser confidence in the global economy reached 5.8 out of ten at the close of 2012, a yearly high and a marked increase from the confidence level reported half way through 2012 of just 4.9 out of ten (ten being most confident). The new optimism in the global economy going into 2013 was one of the key findings of the latest international adviser confidence barometer conducted by Skandia International, part of Old Mutual Wealth*.
The study of 534 advisers from eight regions around the world showed that advisers in Singapore and the UAE felt most confident about the global economy with a score of 6 out of ten, followed by Advisers from across Asia (5.8 out of ten). Reflecting the ongoing Euro crisis European advisers have gone from reporting the highest global confidence level at the beginning of 2012 (5.7 at Q1 2012) to the lowest overall at the end of the year (5.1). In fact, Europe was the only region to report a decrease in confidence levels for the global economy over the year.
Advisers operating in the UK are slightly less confident than average in the global economy, but have still seen confidence improve from 5.3 out of ten at Q3 to 5.6 now. This again is a yearly high and a significant increase from the 2012 low during Q2 when a confidence level of just 4.8 was reported. Not only are advisers in the UK increasingly optimistic about the global economy, sentiment towards the local economy is also steadily improving and has increased from 5.1 at Q3 to 5.5 now.
For the second quarter running confidence levels in the global economy were slightly higher than confidence in local economies: an average score of 5.7 was given for local economies. However, advisers from Asia and the UAE continued to report a reversed trend, remaining significantly more optimistic about their own regions, with Singaporean advisers reporting the highest local confidence of 7.5 out of ten.
Despite starting the year with a positive global outlook, European advisers have been the most pessimistic about the state of their local economy throughout 2012. However, they have reported a slight increase in confidence to 4.3 out of ten, up from 4.1 at Q3.
The state of Europe continues to trouble advisers moving into 2013 with the European Debt Crisis perceived to be biggest economic threat throughout 2012; although, it appears that this concern is starting to ease. At Q2 2012 nearly three quarters (73.5%) of advisers reported the debt crisis as the biggest economic threat, this view is now shared by just over half (54.5%) of advisers. This could indicate that initiatives to stabilise the financial situation in Europe are starting to alleviate concern.
Advisers are facing several challenges going into 2013; with the Retail Distribution Review in the UK and the FAIR review announced in Singapore it is perhaps unsurprising that a third (33.9%) of advisers feel that changing regulatory requirements is likely to be their biggest business challenge for 2013. Low consumer confidence was previously perceived as the biggest challenge for advisers; this has now dropped into second place with 21.9% of advisers sharing this view, down from 31.6% in Q3. This suggests international investors may be starting to echo the increase in confidence advisers are experiencing.
Graham Bentley, head of investment marketing at Skandia, comments:
“Going into 2013 there seems to be a new optimism among the international adviser community, with sentiment towards the global economy steadily improving and the average confidence for local economies also on the rise. Whilst advisers still face a few challenges over the year ahead, it seems that their concerns have shifted slightly from economic instability and the resulting decline in consumer confidence, to regulatory changes that will affect business practice.”
*The quarterly international adviser confidence barometer was conducted by Skandia International, part of Old Mutual Wealth, in Q4 2012 and attracted responses from 534 advisers from around the world – Hong Kong, Singapore, UAE, UK, Europe, Africa, Latin America and Thailand.
This press release is for journalists only and should not be relied upon by financial advisers or customers.