Schroders 2019 Annual UK Financial Adviser Survey: Concerns, Awareness and Opportunities

Schroders’ latest Annual UK Adviser Survey, now in its fifth year, shows that Brexit is again the single biggest concern for investors, with 94% raising it in conversations with financial advisers1. The research found that geopolitics, low interest rates, an equity market correction and a global recession are also prominent concerns.

For the first time, Schroders asked advisers whether they consider ESG in their fund selection and how they see changes in the environment, including climate change, impacting the investment environment, with 76% expecting greater disruption over the next decade. The research also asked about intergenerational wealth transfer, an area where advisers see an opportunity for their businesses.  

Brexit – The beginning of the end?

It’s now over three years since the European referendum and we are just weeks away from a General Election, in which Brexit remains a key issue for all political parties. The survey found that:

  • 40% of clients have moved money out of UK assets as a result, with 74% increasing their asset allocations to the US, the strongest performing equity market since the Brexit vote. This movement to the US was consistent with the 2018 survey findings
  • 22% of advisers report an increased asset allocation to Europe, compared to 52% in 2018 and 50% in 2017 
  • A quarter of advisers said they would make significant tactical changes to portfolios in the event of Prime Minister Boris Johnson’s proposed Brexit deal. In the event of a ‘no deal’ exit from the European Union, this increases to 35%

ESG – A growing awareness

In the same year that the Global Climate Strike for Future2 and the protests of Extinction Rebellion3 hit the streets, the research found that:

  • Advisers believe disruption will be the prevailing theme for the next decade, with 76% believing that disruption from changes in the environment, including climate change will increase
  • 47% of advisers said that climate change was raised by clients either ‘fairly frequently’ or ‘most of the time’ in conversation. 41% reported the same about the environmental impact of investments
  • 43% of advisers explicitly consider ESG factors as part of their fund selection process
  • 91% of advisers report that 0-25% of their clients currently specify that their investments should reflect ESG factors in some way

Asset allocation in 2019 and beyond

The survey found that advisers are relatively bullish with a significant number expecting an increased allocation to equities and reduced exposure to government bonds and fixed income:

  • The greatest reduction in asset allocation exposure over the past year has been in government bonds, with 28% of advisers reporting a decrease
  • 41% of advisers expect to increase their allocation to UK equities over the next 12 months, 34% expect to increase exposure to emerging markets and 32% expect to increase exposure to alternatives
  • On balance, financial advisers expect to reduce exposure to government and corporate bonds over the next 12 months


Philip Middleton, Head of UK Intermediary, Schroders, commented:

“As we saw in the 2018 survey, the uncertainty of Brexit remains a prevailing concern for investors. However, this year’s data gives us reason to be cautiously optimistic on the outlook for the UK. Whilst 40% of investors have moved out of UK assets, capital looks set to be deployed back into UK equities with 41% of advisers expecting to increase allocations in the next 12 months.

“As concern has built in 2019 about the ongoing climate emergency, our survey suggests that awareness of ESG factors among investors is rising and is fuelling conversations with advisers.

“We are pleased to see that 43% of advisers consider ESG factors in their fund selection process as ESG continues to grow in importance. With advisers expecting continued and increased disruption caused by environmental changes, technological advancements and geopolitical challenges, 66% expect market volatility to increase."

Intergenerational wealth transfer – An opportunity

The research indicated that over 90% of advisers' clients are aged 50 or over and this age profile is increasing. Client service propositions are built around this cohort with little or no focus on the next generation. Many advisers are looking to build the value of their business with an expectation of an exit over the next few years.

In order to maintain and increase the business value, advisers believe that the intergenerational transfer of wealth is an opportunity however a large percentage are not actively engaging with this: 

  • 90% of advisers have clients with an age profile of over 50
  • 79% of advisers view the impact of wealth transferring between generations as an opportunity for their business
  • However, only 20% of advisers have a differentiated service proposition to target younger investors and to retain inherited assets  

Gillian Hepburn, Intermediary Solutions Director, Schroders, commented:

“There is a real concern that financial advisers are not engaging proactively with younger investors who will offer them the opportunity to sustain and grow their business over the long-term. The intergenerational transfer of wealth gives financial advisers the chance to build value in their businesses and service the next generation.”

Full research presentation available on request.

1 The survey was conducted online with over 130 UK advisers between 17 and 20 November

School climate strikes: 1.4 million people took part, say campaigners, The Guardian, 19 March 2019

Extinction Rebellion protests continue in London despite ban, BBC Online, 15 October 2019


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