Advisers face a challenging year due to slowing growth in the global economy, according to OECD chief economist Catherine Mann.
Speaking at the New Model Adviser® conference in London, Mann (pictured) said that global growth was expected to be 3% in 2017, and this would make it hard for advisers to achieve returns for clients.
'That is a very negative picture for the global economy and its going to make your business extremely challenging because allocating assets in a low growth climate is very difficult, getting a return on assets in a low growth climate is very challenging,' she said.
Mann explained that sluggish growth led to politicians breaking their promises.
Young people and pensioners had both been let down by policy-makers around the world who had promised to provide them with improved employment opportunities and pensions, according to Mann.
However, Mann noted governments could boost growth by making the right fiscal policy decisions.
‘Fiscal policy using fiscal space wisely, avoiding trade wars and deploying the regulatory changes could [add] about a half a percentage point to global growth,’ she said.
Mann also told advisers Europe needs to hold on to its size and diversity if it wants to maintain business investment.
‘Europe has been a force for integration, a force for a large market place that has created business opportunities within those economies and that breaking up would be a disaster for the business climate and for business investment.
‘Bashing Europe is bashing the foundations for growth. That would be something that, when we play out the election cycle in Europe, I would hope [people see that] having a large market with heterogeneity is the best recipe for business growth,’ she said.