Just over a third (36 per cent) of High Net Worth (HNW) investors (those with over £100,000 in savings or assets) said that they felt more optimistic about the effect that Brexit will have on their wealth than they did this time last year, according to a new survey of over 1,000 UK savers and 500 HNW Individuals commissioned by Rathbone Investment Management.
When asked about the key threats to their wealth, just 23 per cent of HNW investors said that Brexit would be a threat, compared to 30 per cent of HNW investors that were asked the same question in 2017. HNW investors instead highlighted issues such as economic uncertainty (36 per cent), low interest rates (37 per cent) and inflation (34 per cent) to be their biggest concerns. This tallies with 2017 stats where economic concerns such as interest rates and inflation also ranked more highly than Brexit among investment concerns.
Economic factors such as interest rates and inflation that exist outside an investor’s control are evidently still a concern for HNWs. Meanwhile, the noticeable drop in those worried about the impact that Brexit could have on their wealth may indicate that HNWs have put plans in place to protect their wealth and therefore feel more prepared for when the UK leaves the EU.
In comparison, regular savers – those with less than £100,000 in savings or assets – say they feel more concerned about how Brexit will impact their finances than they did last year. Fewer than a fifth (17 per cent) said that they were more confident than last year about the effect of Brexit on their finances. Similarly to HNWs, 20 per cent of savers said that Brexit was a key threat to their savings.
It seems logical that an individual’s level of wealth will have an impact on how prepared they feel for Brexit, and how it will therefore affect their finances. Many HNWs will have financial advisers who will have recommended they reduce their risk exposure to markets that could be affected by Brexit. This probably explains why they naturally feel more confident that Brexit won’t have too much of an effect on their wealth.
Robert Szechenyi, Investment Director at Rathbones comments:
“Investors have been aware of the spectre of Brexit now for close to two years and have therefore have had the chance to make plans to make sure that their finances aren’t badly affected. For those investors that have not yet put plans in place to protect their portfolio – irrespective of its size – it’s important that they start thinking about doing so now. Taking simple measures such as making sure that their portfolio is diversified across both asset classes and markets is a good step in mitigating any risk from economic uncertainty.
“Other economic concerns such as high inflation and low interest rates, although harder to plan for the long term, can also be provisioned against. For example, for people who hold a large proportion of their money in cash, looking to move some of this into a different asset such as a stocks and shares ISA or Self Invested Personal Pension (SIPP) could reduce the impact of a high inflation rate and low rates on savings.”
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