• Advisers warn Brexit implications are the key issue for five-year investment returns
  • Around seven out of 10 advisers feel obliged to offer smoothed multi-asset investment solutions to clients

The implications of Brexit and its impact on markets is the biggest client investment planning challenge expected over the next five years, exclusive new adviser research from Prudential1 shows.

Concern about the potential fall-out from Brexit overshadows worries about low long-term interest rates and the impact of market falls over the next five years, the study for Prudential found.

The research, conducted ahead of Article 50 being triggered on 29 March 2017, found that 84 per cent of advisers say they are concerned about the implications of Brexit on five-year investment returns, compared to 66 per cent expressing concerns about market falls as a result of them being overvalued.

Additionally 63 per cent of advisers are worried about delivering income for clients over the same time period and 55 per cent are concerned about ongoing low interest rates.

The concerns about five-year investment returns are driving advisers to consider smoothed multi-asset investment products to help protect clients’ funds and deliver returns – the research found that 70 per cent feel obliged to offer these funds to clients in current market conditions.

Nearly six out of 10 (58 per cent) of advisers believe there will be a medium-term market correction while 76 per cent say smoothing of investment returns is more attractive to clients when market conditions are challenging, the research found.

Vince Smith-Hughes, investment expert at Prudential, said: “Brexit is overshadowing all other investment planning issues and highlighting the need for solutions which can provide protection and the possibility of strong returns.

“The triggering of Article 50 will provide some certainty for financial planning but will continue to highlight the need for solutions and advice which can support individuals in achieving their investment goals in the short to medium-term.”

A key attraction for smoothed multi-asset investment products is their access to global markets – 74 per cent of advisers questioned said it was a benefit for smaller investors looking for global diversification.

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