How financial advisers can deliver significant value to client portfolios

When it comes to investing in this environment, financial advisers have a critical role to play in keeping investors updated.

Deborah Harbrow, private wealth adviser at Lipman Burgon & Partners, likes to remind her clients that downturns are a natural part of the economic cycle.

Speaking on an upcoming ifa roundtable, focused particularly on global equities, Ms Harbrow said: “They are to be expected, and you have to prepare your client for that.”

“This time last year, it was a lot easier for us to do our job when you’re seeing positive returns compared to now, when there are negative returns. But you must plan for these times as well and this as well, make sure that you have cash reserves to one side. You don’t want to be selling at the wrong time.”

The fundamentals that have always made global equities an attractive proposition to Australian investors remain, despite ongoing volatility.

“Australian equities only represent 2 per cent of the global equity market,” Ms Harbrow said. “If you are buying global equities today, you are buying them at a discount.”

However, while there may be plenty of discounts on offer, Australian investors have become more cautious and are looking to preserve their capital, the head of managed funds at Providence Wealth Advisory Group, Carlo Queddeng, explained on the roundtable.

“We've always had a view that we wanted to protect and preserve capital, particularly in fund manager selection within equities, which is volatile asset class. Making sure that you select the right manager is important. Clients are happy with at least being able to protect on the downside,” Mr Queddeng said.

The pair agreed that it is during these uncertain times that financial advisers can form deeper connections with their clients. Volatility can create concern for investors, but advisers play a central role in reassuring that their portfolios is being managed by a team of professionals.

The global equities roundtable which also boasts Macquarie’s division director and investment specialist, Luis Sarmiento, will shortly be available on ifa.com.au.