Many South Africans’ financial positions have changed over the past two years. The unstable times mixed with volatile markets has shown a shift in investor behaviour and financial advisors are best positioned to assist in rebalancing portfolios.
“Investors are recovering from retrenchments, employment changes, salary cuts and increased cost of living,” says Kreethan Budhu, Head: Distribution at Fedgroup.
“While investors have direct access to a variety of products online, making sense of these options can be daunting and a financial advisor is best suited to help investors navigate the options,” he says.
Additional uncertainty from world events, such as the war in the Ukraine, have led investors to be more risk averse as well as more conscious about creating a diversified portfolio.
Diversified portfolios are leaning more towards products that offer less risk, reasonable and secure returns, capital protection and a transparent or zero fee structure are gaining in popularity.
“Investors are seeking out financial advisors who are able to provide them with a larger variety of financial services products that balance portfolios with lower risk options,” says Budhu.
“They (financial advisors) are best positioned to unpack and analyse the offerings and are able to identify any potential fee pitfalls that will unnecessarily eat into their clients’ investments,” says Budhu.
These include investments that can protect large portions of capital from retrenchment and life insurance payouts, lower risk products, set interest rates, as well as those that offer a zero-fee structure.
Budhu says that in Fedgroup’s conversations with the financial advisors the changes in investments and services required from financial services providers include a strong technical infrastructure for ease of processing investment queries as well as a stronger focus on impact investing.
“With their wealth of knowledge and industry experience, financial advisors are best positioned to assist investors to review and rebalance their portfolios,” says Budhu.