Weathering change: Ensuring a balanced portfolio come rain or shine 

We believe wealth management advisors and their clients can be better prepared to weather the expected lower-return environment by adding investment exposures outside the traditional framework — such as private equity, private credit and other diversifying alternative strategies. Advisors will need to educate clients and clearly identify the risks these investments may introduce to the portfolio. Similarly, advisors should understand the complexity of performing due diligence on these strategies to help ensure they consider potential opportunities from both investment and operational perspectives to reduce risk and increase client return potential.

Mercer identified five key areas of focus for wealth advisors to consider. One of these areas referenced Mercer’s view regarding lower forward-looking returns for a traditional balanced portfolio. In this paper, we discuss the expected challenges of managing a traditional balanced portfolio of 60% equities and 40% fixed income in the face of sustained low interest rates, high equity valuations and reduced return expectations.

Discover what we can do to help you today, and explore the five areas for financial intermediaries to consider – areas we believe are critical for long-term success in 2022. 

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