New findings from LV= reveals that investors are increasingly moving assets into cash or lower risk accounts in response to ongoing economic uncertainty and market volatility.
According to the findings, 7% of Baby Boomers reallocated funds into cash or low risk accounts over the past 12 months. Similar behaviour was observed among Generation X (6%) and the Silent Generation (4%). This shift toward caution, driven by geopolitical tension, political instability and ongoing market volatility, highlights the importance for advisers to consider diversified investment approaches that accommodate varying risk appetites in uncertain conditions.
Of the older age groups, Generation X remains the most likely group to adjust financial plans in response to external conditions, with 41% reporting taking some kind of action. This compares with 36% of Baby Boomers and 34% of the Silent Generation.
According to LV’s research, certainty is the most valued aspect of retirement planning, cited by 40% of Gen X, 56% of Boomers and 60% of the Silent Generation. Economic uncertainty is shaping behaviour across all groups, influencing 70% of Gen X, 67% of Boomers, and 63% of the Silent Generation. Political instability and global geopolitical events are also affecting financial decision making across the board.
Long term financial confidence remains subdued. Half of Generation X do not expect their finances to improve in the next five years, rising to 59% among Boomers and 68% among the Silent Generation. Worryingly, in each of these three groups a sizeable proportion say nothing would increase their financial confidence.
The findings highlight the need for advice led strategies that help clients remain invested while managing their risk appetite. For those seeking lower risk options without exiting the market, smoothed investment solutions can offer a way to mitigate short term volatility while supporting longer term objectives.
Sarah Hills, wealth proposition director at LV=, said: “Investors continue to navigate a highly uncertain environment, and many are understandably seeking greater stability.
“When uncertainty rises, confidence falls - and that’s where smoothed solutions, such as LV’s Smoothed Managed Funds, can make a meaningful difference. These solutions help to offer the stability clients value, while helping them stay invested at times when stepping out of the market could be most detrimental.
“We offer a range of risk rated funds through the LV= platform, enabling advisers to blend them with a wide range of other solutions to meet different client needs - from very cautious investors to those seeking medium risk options with growth potential.”
