The cost-of-living crisis has stoked fears among advisers that clients’ savings could take a hit, according to the latest Embark Investor Confidence Barometer.
The data showed that 51% of advisers say that clients will be forced to adjust contributions or sell investments to meet their retirement plans as a result of the ongoing economic turbulence. In contrast, only 25% of advisers believe that the majority of their clients will be unaffected.
More than half (53%) of advisers have seen an increase in the number of people seeking advice as a direct result of them recognising that their savings must do more.
The Barometer showed that 29% of advised clients and 28% of non-advised consumers have reduced or will reduce the amount they save into GIAs and ISAs. Meanwhile, 14% of advised and 10% of non-advised investors said they are prepared to reduce their pension contributions.
To combat the effects of high inflation and cost of living, 91% of advisers have introduced inflation modelling into their advice process and twice as many advised as non-advised consumers have changed their strategy to target a higher inflation-adjusted return.
Additionally, a third of advised clients have discussed inflation protection via inflation-linked bonds and commodities with their adviser.
Jackie Leiper, CEO of Embark Group, said: “This is a challenging time for investors looking to strike a balance between protecting long-term savings and investments whilst maintaining living standards at a time when household costs are rising steeply.
“Each household will have different circumstances and therefore may need an individual solution and clients will be looking to their advisers to guide them through the options available. The critical thing is to have conversations early to discuss the options and agree a plan.”
