One in five (19 per cent) IFAs expect to see an increase in clients moving money from investments to cash savings.
Opinium’s latest IFA Barometer, which surveyed 200 IFAs, said this is due to increased volatility within the market, with levels of uncertainty running high across the global economy.
Overall, 81 per cent IFAs expect investments to be more volatile in the next 12 months compared to the last.
Of those who predict this rise, almost half (44 per cent) expect investments to be much more volatile.
This compares to only 4 per cent of IFAs who expect the market to be less volatile.
Alexa Nightingale, global head of financial services research at Opinium, said: “Due to the current instability seen in the global market, many IFAs foresee their clients moving money away from investments towards cash savings to protect their portfolios.
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“This shift would highlight a growing caution, as people rethink their willingness to take risks in light of concerns like geopolitical tension, inflation and fluctuating interest rates.”
This data comes as the global economy was shaken by trade tariffs set by the US – with three in four (73 per cent) IFAs noting concern about the geopolitical environment.
This represents the top concern for IFAs when considering what will impact investments.
Meanwhile, the movement of money from investments to cash savings may be indicative of a wider shift away from risk as uncertainty in the market increases.
Should investments become more volatile, half (48 per cent) said they would take a longer-term approach to investment, while a third (34 per cent) said the total amount invested would decrease.
Nightingale added: “While cash savings can provide safety and easy access to funds, they often offer lower returns, so IFAs will need to advise their clients on finding a balance between security and the chance for growth in today’s changing market.”
However, despite the challenges associated with increased market instability, the end effect on advisers may not be all negative.
Half (50 per cent) of those who expect an increase in volatility expect their clients to seek out their advice and three in five (57 per cent) expect investors to become more engaged should market uncertainty increase.
sonia.rach@ft.com