PA Panel: Advisers 'worried' about UK debt position

The Professional Adviser Panel is a (not so) secret group of 250 advisers each week asked for their views on a topical issue. This week: UK debt.

While Greece’s debt crisis continues to worry European investors, more than two-thirds of advisers say there are worried about the UK’s own debt position.

The Chancellor has received fresh criticism from the CBI this week, being asked to detail how the Government plans to repay its debt, and the Professional Adviser Panel is also concerned about the country’s finances.

Concerns over Britain’s huge bank bail-out, and the consequent effect it has had on the UK’s public finances, mean 69% of advisers are worried about the UK’s economic prospects, while 28% say they are very worried.

Some Panel members say they are advising clients to move out of the UK and look globally to make real returns.

Are you worried about prospects for the UK given its debt position and concerns over a hung Parliament?

However, the Greek debt crisis, which has been a major topic in recent weeks, has not led to a mass-exodus for investors in Europe. An overwhelming majority of Panel members say they have not cut clients’ exposure to Europe since the crisis erupted.

But many advisers say they cut their European weightings some time ago, fearing the financial crisis would hit Europe particularly hard.

Have you cut your clients' weighting to Europe in recent weeks?

Advisers are relying on active management to ensure European investments remain appropriate and deal with issues such as Greek debt.

Almost half say they give clients exposure to the European market through actively managed European funds, while 27% do so via global equivalents.

ETFs are also a popular vehicle for obtaining European exposure, with 26% of our panel using them.

How do you give your clients exposure to Europe?

Further details of Greece’s support package are due to emerge this week, although the two biggest eurozone economies – Germany and France – had yet to pledge financial aid to the beleaguered country at the time of going to press.

With Alistair Darling under pressure on the UK’s debts, investors will be looking for details of how Britain will repay its creditors in the next Budget.

Next week: What do advisers expect from the 24 March Budget?

The Professional Adviser Panel is an integral and unique part of Professional Adviser and IFAonline.co.uk and offers readers an accurate representation of the views of advisers all over the UK.

Anyone can pose a question to our panel. Simply email scott.sinclair@incisivemedia.com