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Confidence in the global economy increases but regulatory worries linger

The confidence of financial advisers in the global economy increased for the third quarter in a row to an average of 6 out of 10 during Q1 2013, according to...

8 May 2013

The confidence of financial advisers in the global economy increased for the third quarter in a row to an average of 6 out of 10 during Q1 2013, according to the international adviser confidence barometer conducted by Skandia.*

This rise in confidence (from 5.8 at the end 2012) has been reflected across the majority of regions surveyed. In particular financial advisers operating in the UAE are highly optimistic, reporting a score of 7.1 out of ten. This is a significant increase on the level reported in Q4 2012 of 6 out of 10. In contrast to the generally positive outlook Singaporean advisers were the only region to report a decrease in confidence towards the global economy, from 6 out of 10 at Q4 to 5.7 now. This is particularly surprising as they have shifted from being the most confident at the last survey (joint with the UAE) to the least this time.Adviser confidence in the global economy

Despite an increase in confidence levels the European debt crisis is still perceived as the biggest threat to economic stability, selected by nearly half (47%) of advisers surveyed. Although this is still a key concern for advisers it is not as significant as in previous surveys where 55% of advisers saw it as the biggest threat. It is now closely followed by inflation as the second biggest concern (selected by 40%) for advisers. In fact, in Asia inflation is the number one concern, followed by global contagion and the European Debt Crisis.

Advisers believe they are going to face a number of business challenges throughout 2013, most significantly the changing regulatory requirements across various regions. This was selected as the biggest challenge by over a third (35%) of respondents. Following this, low consumer confidence, market volatility and the cost of running a business were also highlighted. However, market volatility was cited as the biggest challenge in Singapore, which may explain why advisers there are concerned over the state of the global economy.

Phil Oxenham, head of proposition marketing at Skandia comments:Phil Oxenham, head of proposition marketing

“Following a good start to the financial markets this year economic sentiment is on the rise, and it’s great that this feeling is largely replicated on a global scale. Whilst confidence is on the up, it is clear that financial advisers still believe there are significant economic concerns, for example, recent issues such as those in Cyprus have highlighted that the economic crisis is not yet over and explains why market volatility and the European debt crisis still concern financial advisers around the world.

“In many regions, regulation presents a significant business challenge for financial advisers with the RDR in the UK, commission disclosure in Hong Kong and the Financial Advisory Industry Review in Singapore all aiming to improve transparency and ultimately improve consumer confidence in financial services. Skandia will be working hard to help advisers across these regions understand the changes and position their business for future growth.”

*The quarterly international adviser confidence barometer was conducted by Skandia, part of Old Mutual Wealth, in March 2013 and attracted responses from 385 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.