Spending time in the market rather than trying to time the market will benefit clients most in the current volatility, Skandia believes.
It says the natural urge to “panic sell” in today’s landscape can be overcome if advisers have faith in long-term strategic asset allocation.
Skandia says using technology can help an IFA adjust asset allocation if client risk attitudes change.
“The worst mistake investors can make is to come out of the market once it has already dropped,” it says.
“Platforms and the e-business… can help them (advisers) monitor their clients’ attitude to risk over time and switch to new funds if necessary without exiting the market.”
Skandia says it has seen “significant demand” for fixed interest offerings in the current climate.
“Market volatility often makes investors nervous, but activity in the market is not necessarily a call to action,” Skandia investment marketing head Graham Bentley says.
“Changing investments after the markets have seen a fall may only serve to crystallise losses, whereas staying invested keeps alive the opportunity to recover.
“Once this is in place 'time in the market' is more important, and significantly less risky, than trying to 'time the market'.”
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Partner Insight: Continuing the Architas education series for clients.
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