Risk-averse Brits need advisers to get them investing

Only six per cent of British savers are risk-takers when it comes to their investments, new research from Aegon has found.

The majority, 56 per cent, said that their risk appetite is either low or zero, and they prefer minimal potential losses with modest gains.

Most British savers surveyed preferred cash over equities.

These attitudes can hurt overly-cautious investors, however, as they can see their savings stagnate.

The most common reason behind this attitude to risk is a fear of making a wrong investment decision, which was cited by 26 per cent of savers.

Twelve per cent of British savers said they are more cautions now that they were 10 years ago – 31 per cent of them due to nervousness about the  overall state of the global economy and 24 per cent due to concerns that there will be another financial crash.

Another 19 per cent were put off by financial losses in the past.

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Aegon concludes that the survey’s results showed “poor understanding of investments and lack of confidence” among investors and called for investment advice that would encourage them to take measured risks.

Fourteen per cent of surveyed savers said they would be open to taking a greater investment risk with the knowledge that higher returns required more risk.

Aegon investment director Nick Dixon says: “Regardless of the current turbulent political and investment landscape, failing to take measured risk is not prudent.

“Over the long term, reckless caution is the biggest risk of all. Our research shows that the majority of UK consumers are exposing their money to stagnation and putting their assets at risk of falling well below the rate of inflation.

“This highlights the great value of good financial advice, which can build savers’ confidence and improve their understanding of risk to inform the right long-term investment decisions.

“With careful analysis, both adviser portfolios and multi-asset funds can be constructed to meet specific risk and return objectives.”

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. Nicholas Pleasure 3rd January 2019 at 11:29 am

    Personally I wouldn’t risk advising anyone to invest with Aegon.

  2. Oh sure; dragoon a zero risk tolerance investor into investing and just wait for the complaints to roll in.

    Providers are at it – as always. Setting up the balls for advisers to fire and when the effluent hits the ventilator they can stand back un-besmirched.

  3. Risk averse investors should be left to their own instincts, they will bring nothing but pain to your door if their savings fall in value and good luck with proving it wasn’t your fault, for encouraging them to change direction.

    Let’s also remember that savings interest is not the only source of people’s wealth in and outside of retirement.

  4. Sad to say that this will end in tears.

    I think Aegon are making a big mistake here.

  5. Setting aside money into cash or investing long term in minimum risk securities that barely outpace inflation are foolish. To get better returns than either ~ a decent bang for your buck ~ you HAVE TO be prepared to accept the prospect of occasional downturns in valuations ~ sometimes severe and sometimes prolonged ~ and, when such downturns come along, keep going (with regular contributions). History proves that this will always pay off.

    It’s a matter of education and those who simply refuse to take this fundamental reality on board are beyond help. The job of a good adviser is to help clients get their heads round this crucially important approach to investing. Nothing is for nothing.

    Those who are absolutely dead set against the idea of ever having to weather any but the most minimal and short term losses are beyond our help. Leave them to the illusory comforts of Absolute Return funds.

    One of the wealthiest men in the world is Warren Buffett and he’s never invested in anything but equities. As somebody once said, worrying about the prospects for your holiday planned six months hence because it’s raining today is pointless. Unless you need the money tomorrow, a downturn in the value of your portfolio today really shouldn’t matter.

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