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Investors are over-exposed to UK equities claim IFAs

30 September 2009 / by Rebecca Sargent

Nine out of 10 financial advisers believe that investors are over-exposed to the UK stock market, a survey from Ignis Asset Management has revealed.

In fact, the survey found that just nine per cent of IFAs believe that current investment allocation levels are appropriate. The survey, conducted in late August also found that more than half of advisers said that they do not believe we are in a bull market.

These bearish views continue as 91 per cent of advisers believe that the FTSE 100 will close the year below 5000, slightly lower than its current level. Commenting, Jonathan Polin, director at Ignis Asset Management said:

"Investors traditionally have a home bias when choosing funds but it is startling to discover that almost nine in 10 advisers believe UK investors are over-exposed to UK equities.

"It is clear that investors need to rethink their strategy and seriously consider whether their existing asset allocation is likely to deliver the performance they need in order to meet their requirement objectives."

Meanwhile, the survey also found that 55 per cent of advisers have reported an increase in investment business over the last three months, while 86 per cent expect business to increase over the coming three months.

Mr Polin adds: "After such a tough period for us all it is encouraging to see that advisers are feeling fairly bullish about their business levels, if not about the UK stock market.

"Investors are clearly recognising the value of advice and seeking help when making decisions that could have a serious impact on their future.

"The fact that advisers expect business levels to rise over the coming months is further proof that investor sentiment is improving," he adds.

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