Client trends October 2022:
Proactive solutions sought as recession reality sinks in

There has been no shortage of drama as autumn sets in, but knowledge of trouble in the markets has thankfully manifested as proactiveness rather than paralysis among our users.

Turmoil signals a generational buying opportunity for some

Over recent weeks have seen a bloodbath in the bond market, with a massive sell-off of gilts (UK government bonds) triggered by the revolutionary economic policies unveiled by the Government in the Mini-Budget, on top of the prospect of persistent inflation (and therefore successive interest rate increases); at the same time, equity market falls now also look like more than “froth” coming off as companies all over the world come under pressure.

Yet there seem to be many people looking to follow the adage usually credited to financier Nathan Rothschild, that one should “buy on the sound of cannons, and sell on the sound of trumpets”. Indeed, many pundits are asserting that now represents a once-in-a-generation buying opportunity for those with a long-term outlook and the nerves to withstand rocky times ahead. Sterling assets, and UK PLC generally, are being unfairly appraised by the markets, many say.

Many pundits are asserting that now represents a once-in-a-generation buying opportunity for those with a long-term outlook and the nerves to withstand rocky times ahead

Enquiries have often centred on people wanting advice on how to best time the markets to take advantage of this situation. This is something we would usually caution investors against, since doing so correctly is so difficult and drip-feeding money in is usually a wiser approach to smooth returns and risks. However, this might indeed be a time to plough significant excess cash in under the advice of a professional who has an overview of all the variables in play. Fortune favours the brave, after all!

Recession-proofing portfolios is now a real priority

The spectre of a global recession has loomed large for some time, but investors now seem to have accepted this an inevitability and are turning to the question of how to recession-proof their portfolios with very great seriousness indeed.

The urgent need to cool inflation has left central banks walking a tightrope between successive shocking interest rate rises and the recessionary pressures those will likely cause; indeed, recession of some degree is accepted by many as the price that must be paid to get inflation under control. How deep and how long remains to be seen.

Anyone with an eye on the markets (and geopolitics too) knows we face incredibly complicated times, and that alighting on safe havens and robust diversification strategies has never been more challenging

We’ve heard a lot from those seeking “safe haven” assets which can weather the storm ahead (thankfully, most of the investors we have been speaking too have been very well aware that excess cash is generally not a good idea because of the erosive power of inflation – except, that is, if cash is being kept on hand to snap up bargain-priced assets as opportunities arise). How to best diversify across markets, regions, sectors, asset classes and currencies in general is invariably their second question.

Anyone with an eye on the markets (and geopolitics too) knows we face incredibly complicated times, and that alighting on safe havens and robust diversification strategies has never been more challenging. The wealth managers we are in daily contact are very well placed to help you on both fronts, however, backed as they are by institutional-grade research – not to mention decades of experience across their organisations. Is now the time to review your investments before a recession really bites?

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Top Tip

Mayhem in the equity, bond and even mortgage markets has marked the past few weeks, and there is likely plenty more drama to come. It is in times like these that having a professional in your corner is truly invaluable – not only in protecting you financially, but also in shielding you from the worries caused by all that is going on. Think of getting professional advice as an investment, in both your financial and psychological health.

Lee Goggin - Co-Founder

Lee Goggin

Co-Founder

Users turn to private banks amid mayhem in the mortgage market

Fears of further, perhaps brutal, interest rate rises saw lenders withdraw deals in record numbers in recent weeks – a situation which has led to high net worth individuals opening their minds to private bank lenders to a very noticeable degree.

As buyers will know, High Street lenders are constrained by complex algorithmic systems which determine which level of funding borrowers can be offered, with decisions about what they can afford made by black-box decision-making technology which can seldom be argued with. In contrast, private client lenders are able to consider the totality of an individual’s financial position and, crucially, take account of uneven or slightly unusual income streams. A wealthy individual may then be welcomed with open arms by a private bank, after having been turned down by a regular lender. In addition, they may well be able to secure very much larger sums, particularly if other assets like investment portfolios are also on the table.

A wealthy individual may then be welcomed with open arms by a private bank, after having been turned down by a regular lender. In addition, they may well be able to secure very much larger sums, particularly if other assets like investment portfolios are also on the table

It is also worth knowing that the institutions we work with are often able to offer bridging finance of various other kinds, meaning that exploring your options with a wealth manager might be the key to unlocking your property dreams. Read our recent guide to HNWI mortgages here or get in touch with our friendly team to learn more.

Taking one short questionnaire can get the ball rolling

We help affluent individuals get on the way to solving a huge range of issues spanning investment management, financial planning, retirement, inheritance, mortgages and more. All these individuals get started by taking one quick and easy step: completing our short wealth manager matching questionnaire to ascertain their needs.

Dive right in if you have a clear idea of what you are looking for in an adviser and have a few minutes to spare, or, if you would like some speak to our expert and unbiased team, please don’t hesitate to get in touch.

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