View more on these topics

Five minutes with… Tavistock Wealth’s Steven McGregor

Before leading a workshop at Money Marketing Interactive next month, Tavistock Wealth investment consultant Steven McGregor talks market cycles and preparing for a downturn.

What’s behind recent market volatility?

Market volatility has increased in recent months for varying reasons: faltering UK and European negotiations leading up to Brexit, US/China trade tensions, and changing language from the US Federal Reserve on the pace of US fiscal tightening, to name but a few. All of these factors affected market sentiment in 2018 and the early part of 2019, leading to a rise in volatility from historically benign levels in 2017.

Are recent market movements unique or unprecedented?

A return to more normal levels of volatility in 2018/19 from benign levels in 2017 isn’t unique. It is worth remembering though that financial markets move in cycles and we are approaching the end of this one. Nobody can predict when the next bear market will occur, however the current UK bull market (10 years) is already longer than the average length (6.3 years).

The next bear market will inevitably come and when it does it will typically bring with it heightened levels of market volatility, leading investors to experience capital losses if they are not careful. The average length of the bear market in the UK lasts for 2.4 years, with an average cumulative loss of -36per cent.

It is quite feasible that the next bear market could see equity and bond markets fall simultaneously. Historically when equities have fallen bonds have performed relatively well, however the bond bubble is currently bursting. This combined with current levels of interest rates leaves us in a unique situation.

Source of statistics: Tavistock Wealth

Steven is leading a workshop entitled Don’t fight with bears at MMI London. Register for your free place here.

Is there any hope central banks or governments can reverse the current bear market?

Crucially, this time around, we are facing a unique set of circumstances which may make it harder for investors to navigate. Historically, when the bear market arrives, central banks have had levers they can pull to stimulate the economy, such as cutting interest rates.

However, given the current (record low) levels they will have less ammunition in this regard. Quantitative Easing (QE) has been another method of stimulating the economy in the past, however this is coming to an end as we enter a period of Quantitative Tightening (QT). Quite simply, central banks have less ammunition today.

How can advisers position their clients’ portfolios to avoid the worst of any downturn?

Advisers should look to position their clients’ portfolios to avoid this potentially devastating downturn sooner rather than later – but they don’t have to run to cash or expensive, risky bonds to do this. By investing in a protection portfolio that contractually guarantees 90 per cent of the highest ever portfolio value, clients can remain invested and be protected from the next bear market.

Crucially this enables investors to participate in any upside that the current market cycle has to offer. Should the bull run continue the upside potential will be slightly less than an ‘unprotected’ portfolio, but positive returns can still be made and whenever the bear market happens you will be in the right place.


Sector focus: Is Mixed Investments the way forward?

While the past 12 months have been difficult for investors, many calls have paid off The Mixed Investment sectors have been hugely popular in recent years. The rise in popularity of multi-asset funds has been phenomenal. As investors seek simpler choices and more transparency with their funds, multi-asset has become an easy route into investing, […]

Andy Thompson: “We didn’t know if a fully-integrated Quilter model would work”

The expansion of Quilter’s national model to include the mass affluent market has been built off widespread industry demand for more integrated propositions, says Intrinsic chief executive Andy Thompson. Speaking to Money Marketing, Thompson says the vertically-integrated Quilter, formerly Old Mutual Wealth, has seen more success from its national arm Quilter Private Client Advisers than […]

The Wells Street Journal: Bullsh*t bingo and an overwhelming choice

A weekly account of the curious goings-on in the world of financial services Introducing bullsh*t bingoFNZ-backed technology provider Advicefront has debuted a list of acronyms and words that advisers dislike, helped by the ever-amusing Alistair Cunningham of Wingate Financial Planning. Dubbed “bullsh*t bingo”, the list includes regulators and bodies including the FCA, Financial Ombudsman Service, […]

The savvy consumer

In last year’s FCA thematic review of the mortgage market, one of the key things highlighted was the “savvy consumer”. That’s the client who comes in the door with a very clear idea of what they need and expect you to get them it. They don’t think they need advice, they have after all consulted […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm