Warning: Lock-In Brexit Bounce Ahead of Market Correction

by | Aug 15, 2016

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Okay, it’s not good enough to make a Hollywood blockbuster, but here is a plotline worthy of our attention.

Most advisers, says new research, are urging savers to lock-in the Brexit bounce ahead of worries that a major stock market correction is on the horizon.

The research by MetLife shows that nearly 60% of advisers believe the markets will suffer a major drop before the end of 2016. And they also believe that retirement savers need to protect their pension funds now, following the strong performance of the FTSE since the EU Referendum vote.

The figures also showed one in three will contact clients about locking in gains now and nearly one in five have been contacted by clients for pension reviews since the EU Referendum.

The backdrop is a FTSE100 which has surged more than 6% since the Brexit decision and now stands at a one-year high.

Wealth Management Director at MetLife UK Simon Massey said: “The predictions of doom and disaster after the Referendum vote have so far been proved wrong with the initial shock turning to a market surge, a so-called ‘Brexit bounce’.

“But, those clients nearing retirement are faced with decisions that ultimately will impact the rest of their retired lives. There’s never been a more appropriate opportunity for advisers to consider solutions that offer guarantees and the potential to lock-in current gains.

“Clearly there is real nervousness out there with advisers concerned about potential downturns and braced for market volatility ahead with most expecting a significant correction this year as the picture becomes clearer

“Clients still want and need to invest but many are re-adjusting their attitude to risk. They are focused on guaranteeing and capturing gains while they can, while accepting that uncertainty is here to stay for the foreseeable future.”

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