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Active investing critical for advisers

Oksana Patron24 October 2023
Money and hourglass

Advisers are predominantly tasked with limiting downside losses or drawdowns for their clients across all age groups, even at the expense of upside capture, according to the study from Trans-Tasman fund manager Milford.

The research titled “Safe Hands on the Wheel”, which was commissioned by Milford and conducted by Ensombl, surveyed Australian financial advisers who represented more than 700 clients and has confirmed that the attitude towards investment and financial risks was a preference for stable and reliable returns.

According to Milford’s chief country manager in Australia, Kristine Brooks, one of the tools advisers had to help navigate their clients the investment landscape with a focus on their individual goals was active management which can help ‘smooth the journey’.

“Helping clients navigate the current challenging investment landscape while progressing towards their goals and dreams takes expertise, empathy, and the right tools. It is clear that one of the tools advisers are using is active management,” she noted.

The results of the Milford’s report were also consistent with the ASX Australian Investor Study 2023 which found that predominantly clients were not engaging financial advisers to chase investment performance but were rather looking for help to achieve their higher goals, both in terms of the lifestyle and financial aspirations.

Further to that, navigating volatility in the markets and preserving capital for clients was far more important for the clients than chasing the highest possible investment returns and only 40% of the clients would only accept a 5% annual loss on their portfolio while a further 23% said they would not accept any annual loss.

Milford has more than $16 billion of funds under management across Australia and New Zealand and services a range of clients, including over 100,000 direct investors and financial advisers.



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