Nearly all advisers (95%) expect the pandemic to cause a major global recession although 66% believe fiscal and monetary policy can mitigate the impact.
Almost half of adviser clients (49%) expect to delay their retirement plans due to the Coronavirus impact on markets.
The survey for Schroders on the impact of the pandemic also found:
• 89% of advisers believe the market decline presents a good buying opportunity.
• While 69% of advisers plan to review their overall investment strategy 61% will wait until the outlook is clearer before making portfolio changes
• 100% of advisers report that their clients have universally been broadly understanding about the impact of the Coronavirus crisis on their portfolios
Just over a third of advisers (35%) believe that the Coronavirus will impact client attitudes towards sustainable investing. Some 65% of advisers said the crisis would increase the attention they paid to the ESG risks associated with investments.
Despite huge market volatility, the survey found “remarkably little change” in investor sentiment between November 2019 and April. Only 5% of advisers said they would describe the sentiment of their clients as very bearish, up from 2% in November 2019.
The level of advisers’ personal interaction with clients rose significantly with 73% interacting with more than 25% of their clients compared to 36% of advisers in an average month.
Key financial concerns advisers heard were capital loss, the main concern for 53% of advisers’ clients, the impact on retirement plans (85%) and investment income loss (64%).
Almost half (49%) of advisers surveyed say they have clients who have delayed their retirement because of concerns about reduced capital or income due to the impact of the Coronavirus crisis.
While most advisers say that their attitude to investing in passive funds has not changed as a result of the coronavirus crisis, 27% of advisers say they are less likely to invest in passive equity funds and 20% say they are less likely to invest in passive fixed income funds. Only 7% of advisers say they are more likely to invest in passive equity funds and 4% in passive fixed income funds.
Doug Abbott, head of UK Intermediary, Schroders, said: “Whilst the long-term consequences of the current economic recession have yet to be fully understood, the Covid-19 pandemic has already brought about some profound changes to the investment community.
“Capital preservation becomes understandably a key priority for investors who now favour an intensified mode of interaction with advisers along with a more active style of investing. The actual impact of the pandemic on investor sentiment remains however surprisingly mild according to our survey, even if retirement plans for half of advisers’ clients seem delayed for now.”
• The survey was conducted online with 63 UK advisers between 15 and 23 April.