Chestnut Financial Services

Chestnut Financial Services, Financial Advisers

Speak to our customer team:

Mon-Sat   9 am to 6 pm

Call Us: 01522 788887

Independent Financial Advisers

Solving Problems For Our Clients

Chestnut Financial Services, Financial Advisers
Investment Advice From Ian Francis Independent Financial Adviser
Investment Advice From Ian Francis, Independent Financial Adviser

What Can We Do When We Hear Bad Economic News?

UK inflation is rising at its highest rate in four decades and average asset returns are struggling to keep up with the pace. In addition, unstable geopolitics, and the lingering threat of Covid-19 is keeping market volatility high.

So what can we do in these uncertain times?

The Mindset Shift

Each business cycle has inflationary periods so we should not be surprised by this latest surge. We have become accustomed to accepting the fact that investment solutions targeting above inflation growth will do that on an annual basis, in the same way that we are programmed to expect that our wages will continue to rise with inflation.

Naturally, there is always a need to temper expectations during these periods and market shocks. But there are also actions that can be taken to mitigate these risks such as adopting a broader diversified investment approach as not all asset classes have lagged inflation during this current cycle.

Having a more diverse spread of asset classes has the potential to help maximise risk-adjusted returns in a wider variety of market conditions and minimise the impact of a large fall over both the short and long term.

Sustainability of Income

Those clients who are in pension drawdown and taking regular income from their plan will naturally be feeling the bite of inflation. Of course, income can be increased to keep pace or even outstrip the rate of inflation, but this can have a detrimental impact on the sustainability of income.

So how can income sustainability be preserved in times like these? It is certainly a sensible move to limit the amount of income currently being withdrawn. And in addition to reducing income, do not be afraid to review expenditure. Reducing current and expected levels of expenditure can improve income sustainability over the longer-term.

Dialling up risk

Increasing your investment risk level is one way to potentially generate higher returns, but is this suitable practice and how would you feel about an increased exposure to risk during periods of higher volatility?

This is simple investment fundamentals in that to earn higher returns, you must be willing to increase your exposure to higher-risk investments. This higher risk may yield higher returns over both the short and long term, but it will almost certainly yield periods of greater underperformance and that is an undesirable outcome for many individuals.

The primary reason for diversification is that it reduces concentration risk and ensures portfolios are more resilient to market twists, but a broad diversification approach can also deliver more reliable investment outcomes.

However, over the inflationary period of 2021 and into 2022 the broader diversification has proven to be much more resilient and recouped the shortfall during the post-Covid recovery.

Focus on the tried and tested

There are certain investment fundamentals that have been around for a long time and for a very good reason too.

While we cannot control what inflation does or indeed influence unstable geopolitics, we can choose to stay rational, disciplined and focused on our goals – whatever those needs may be.

By committing to regular reviews, you have more opportunity to advise small changes to ensure you remain on track to meet your income requirements.

In an environment where inflation is forecasted to continue rising well into 2023 and the market outlook remaining uncertain, the importance of regular reviews cannot be emphasised enough.

Personal Finance Society Qualified Member Logo
What it means to be a member of the Personal Finance Society

Clients requiring financial planning benefit from advice that is clear and concise. Such advice comes from an adviser that is suitably qualified and experienced to advise them and manage their financial planning.

We have been advising clients on insurance solutions for several years now, backed up not just by professional qualifications but also by being directly regulated by the Financial Conduct Authority, so subject to all their rules and regulations, to give you the most suitable deal.

Our team led by Ian Francis Independent Financial Adviser
What's on your mind? Let's talk...

We offer a free, no-obligation, initial telephone consultation for new clients to answer some initial questions and help you with some first steps.

After that, we will then ask if you would like to set aside more time at a good time of day for you, when we can meet in person, on video, or by phone, whichever is most convenient for you.

What Our Clients Have Said Logo
What our clients have said

"We found Ian to be the sort of person that we could trust. That's not easy these days.

We could see he knew about investments and strategies, but he turned the tables around on us and started with what we wanted to do for our lives ahead of us, then worked out a plan of how to get there."

Paul and Mary, Saxilby

Contact Us

Chestnut Financial Services Limited

2a Sadler Court, Lincoln, LN6 3RG

Lincolnshire Police Federation Logo

We are proud supporters of the

Lincolnshire Police Federation

Important Information

The value of investments and any income derived from them can go down as well as up as a result of market or currency movements and investors may not get back the original amount invested.

Past performance is not an indicator of future performance.

Screening out sectors or companies may result in less diversification and hence more volatility in investment values.

Also, tax and legislation may change and your own individual circumstances, including where you live in the UK, will have an impact on your tax treatment.

The guidance and/or advice contained within this website is subject to the UK regulatory regime. It is therefore targeted at consumers based in the UK. Chestnut Financial Services Limited. Registered in England no 9918363, 2a Sadler Court, Lincoln, LN6 3RG. Authorised and regulated by the Financial Conduct Authority.