From Brexit to Trump, the most unpredictable era in history

A new survey by UBS Wealth Management revealed that the wealthiest members of society are seriously worried about the global financial system and 88 per cent in Yorkshire see this as a big concern.

Despite this, two in three (66 per cent) Yorkshire millionaires believe that Brexit will have a positive impact on their short-term financial planning, compared with 71 per cent in the UK all together.

​Nearly three quarters (​72​ per cent​) of Yorkshire millionaires ​believe Brexit will have a positive impact on their long-term financial planning, ​less than the 78​ per cent​ figure across the whole of the UK.

Looking at ​Brexit’s impact on ​the UK as a whole​ rather than their personal circumstances​, Yorkshire millionaires are less optimistic than wealthy people elsewhere in the country.

59​ per cent of Yorkshire millionaires​ think Brexit will have a positive impact on the UK in the short term, compared ​with​ 70​ per cent​ nationally.

​Over​ the long term, prospects improve​.​ 72​ per cent​ of Yorkshire millionaires believe Brexit will have a positive impact on the UK in the long-term, compared ​with​ 75​ per cent​ nationally.

​During this period of global financial uncertainty, two thirds​ (66​ per cent​) of the UK’s millionaires say they are suffering from information overload. Nearly three quarters (74 per cent) admit short-term distractions and unforeseen events keep getting in the way of their financial plans.

They believe that emotions​ are now more important than objective facts in shaping​ ​public opinion. 79​ per cent​ believe elected governments can only respond to short-term dangers.

​Despite all th​e worries​, the number of millionaires who are optimistic about their​‘s​ and the world’s​ ​future far outweighs those who think otherwise. According to the UBS Confidence Index,​ ​more than ​a half (54​ per cent​) of UK millionaires feel optimistic and confident about the future,​ ​compared ​with​ just 12​ per cent​ who are pessimistic​.​ The remainder d​o​ not anticipate a change.

​The report found that the UK’s wealth​iest people​ are consistently more optimistic about their own future prospects​ ​than they are for the wider economy. 85​ per cent​ say they are confident ​about​ their own​ ​ability to assess financial risks.

Part of the reason for that confidence is the belief that they can find safe places to invest​ ​their money in an uncertain environment.

Nick Tucker, ​h​ead of UK Domestic, UBS Wealth Management, said: “Some people​ ​would argue the world is easier to predict than ever. Britain’s wealthy clearly feel the​ ​opposite. ​

​"​After a year of Brexit, high profile shocks and global tensions, most believe we live​ ​in a very unpredictable age. Political, economic, societal and financial risks are all prominent​ ​in people’s minds.

“In response, we see evidence of short-termism creeping in, people reacting to each event​ ​as uncertainty grows. Investing on your own doorstep can be tempting in this climate.​ ​Holding onto cash can feel safer, even as it erodes your wealth in real terms. Although​ ​confidence remains high, neither approach is likely to work well in the long-term.

“In an unpredictable world, it remains best to look to the long-term, focus on your goals and​ ​invest in a balanced portfolio across a range of assets and locations.”

​​UBS Wealth Management recommends three tactics to help deal with unpredictability:

1. Focus on the long term. Avoid responding to short-term events or distractions. Cutting​ ​through this noise has never mattered more, because there has never been so much of​ ​it. Think about your long-term goals, create a financial plan and stick to it.

2. Maintain a diversified portfolio. Exposure to a broad range of assets and geographies​ ​is essential. It helps to avoid the risks of domestic biases. Adding alternative investments​ ​also limits shocks from domestic and global uncertainty.

3. Be wary of overestimating the safety of cash. Cash may seem to be attractive,​ ​especially in an unpredictable world. But inflation erodes its value, meaning that cash​ ​assets can damage your financial health in the long term.