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Advisers trend towards caution as Brexit looms

18 November 2018

With Brexit a little over four months away, advisers are increasingly leaning towards a cautious investment strategy, new research from Canada Life has shown. 

Around one in three advisers (30%) say they are more likely to recommend investing in defensive stocks as a direct result of the vote to leave the EU, up from just one in 10 a year ago.

The same amount of advisers (30%) said Brexit has had no impact on their investment approach.

Despite caution prevailing for many advisers, however, their appetite for international investments has risen over the past year, with 19% looking at more opportunities to invest overseas compared to 7% in 2017. Just 3% said they would not look to invest in a EU jurisdiction because of Brexit.

Richard Priestley, executive director, Canada Life said advisers were likely to take a cautious approach until the full impacts of the break from the EU were better understood.

Priestley commented: “While the exact consequences of Brexit continue to remain unclear, it’s likely that in the event of a hard Brexit we would see some devaluation in sterling. That would benefit those businesses with overseas revenues, something advisers may need to keep in mind in terms of clients’ financial strategies. As total UK exports last year were worth around £616 billion, you can get an awful lot of exposure to overseas revenues by investing in UK companies that export.”

Priestley added: “It’s not surprising that international markets are looking increasingly attractive, as advisers fear an adverse impact primarily focused on the UK.”

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