In the traditional portfolio construction, 60% of assets are allocated to equities while 40% of assets are allocated to fixed income products.
In the survey conducted by Natixis, 71% of the respondents said that the majority of the clients are conflicted between pursuing return and protecting capital, whereas advisors want to explore new approaches towards portfolio construction.
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Further, 52% of advisors feel that a 60/40 portfolio is no longer the best way to pursue returns and manage investment risk for most investors; compared to only 8% who believe it is.
Nearly half (46%) of advisors responded that there is a need to replace traditional diversification and portfolio construction techniques with new methods.
31% of advisors say a 60/40 portfolio is not an appropriate technique for moderate risk takers; compared to only 18% who say it is.
The study has also stated that post 2008 financial crisis; individual investors are talking more with their advisors and building stronger relationships.
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By GlobalDataTwo-thirds of advisors have reported that majority of their clients have been more interested in discussing risk over the past year.
82% of the advisors responded in the positive on having talked with their clients about alternative investments and added that clients do not appear to be as apprehensive about alternatives as might be expected.
While 47% of advisors said that investors they work with are not concerned about the risk of alternative investments, 53% of advisors differed.
John T. Hailer, president and chief executive officer, Natixis Global Asset Management remarked "Investors have formed stronger relationships with their financial advisers because of the market volatility in the last three years as they try to balance risk and reward, manage volatility and build more durable portfolios in difficult markets."
"Amidst ongoing worries about the macro environment it is clear UK financial advisers have an increasingly important role in helping clients to build truly diversified portfolios to meet their long term objectives," remarked Ed Farrington, NGAM’s managing director of Global Key Accounts.
