UAE investors shunning advice
Only a small minority of investors in the United Arab Emirates will seek financial advice this year, despite the risk of missing out on large returns, this year’s Schroders Global Investment Trends Survey has revealed.
In the UAE, just under a quarter of investors said they would invest based on professional financial advice in 2015, with 44% planning to invest on their own, based on reactions to market conditions. Despite 88% of the respondents in the region achieving an average investment return of just 7% last year, 80% said they would continue to rely on their own judgment to make investment decisions.
Grace Ho, head of marketing, Asia, Schroders, said: “Those planning to go at it alone may be too focused on their home region or the asset classes they are most familiar with. They are not maximising their investment capital, and at the same time exposing themselves to unnecessary risk. “Professional advice can give investors a global perspective, to help them achieve their investment target and provide sustainable income.”
The survey showed 67% of investors living in the UAE felt the Middle East could deliver the best returns globally in the next year, higher than any other country’s view of the region. However, 90% expected to make a profit in the next 12 months, compared with 93% of Asian investors and 91% globally. Globally, the survey, which interviewed over 20,000 retail investors in 28 countries, found a “significant disconnect” between investors’ expected returns and their appetite for risk.
Despite nine in 10 investors expecting to see their investments grow over the next year, 45% of investors’ funds are being placed in low-risk and low returns assets such as cash, while just 21% of their portfolio is going to higher-risk products such as equities. Massimo Tosato, executive vice chairman at Schroders, said: “Expecting double-digit returns within the next 12 months while only placing less than a quarter of an investment portfolio in higher-risk assets suggests investors are not taking a realistic approach. “It’s imperative that investors shape their portfolios to balance the risk profile with the returns they are seeking, and, in most cases, that will require a level of professional advice.”
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