You are here: Home - Saving & Banking - News -

Volatility changes attitudes to risk

Written by:

Stock market volatility has prompted a dramatic switch among investors in their attitude to risk, research among independent financial advisers (IFAs) by Prudential shows.

More than 75% of advisers say clients’ attitude to risk has changed in the past year due to volatility. And analysis of industry data by Prudential shows the change in attitude has been reflected in net retail sales of individual savings accounts (ISAs) – the cautious managed sector is by far the best-selling among the 30 classified by the Investment Management Association for November, December, January, February and March.

Prudential believes the new rules on ISAs that have come into effect in the 08/09 tax year which allow savers in cash ISAs to transfer money into equity accounts will provide a further boost to the sector. Around £22.6bn was invested in cash ISAs during the 2006/07 tax year.

Research among IFAs shows six out of 10 advisers say more than half of their clients are now looking to a more cautious investment strategy in response to current stock market conditions.

Gary Shaughnessy, managing director of Prudential Retail Life & Pensions, said: “Stock market volatility is changing attitudes to risk among investors but the change in attitude should not necessarily mean a switch away from equity investing.

“All the evidence shows that in the long-run equities outperform cash and that investors who stay out of the stock market are not necessarily maximising their potential returns. The new ISA rules which came into effect this tax year are an opportunity for advisers and their clients to reassess their investment strategy and to shift some cash savings into funds investing in shares.”

Related Posts


Tag Box

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

ISAs: your back-to-basics guide for 2018/19

Here’s everything you need to know to make the most of your unused ISA allowance ahead of the 5 April deadli...

A guide to Sharia savings accounts

A number of Sharia savings products have upped their game in recent months, beating more familiar competitors ...

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
FEATURE: A guide to loan protection

With hard hit Brits continuing to turn to personal loans, how are they protected when securing such finance? Barney McCarthy...