Inflation has dented the real value of private client portfolios to the same levels they were in 2016, according to analysis from investment consultancy Asset Risk Consultants.
Despite the FTSE100 reaching a fresh high and inflation falling, ARC warns that adjusting for inflation, most private client portfolios are worth no more than they were in 2016.
The analysis also shows that typical sterling private client investor real wealth has fallen by 15 per cent from a peak in 2021.
ARC says that real returns would need to average 7.3% over next 10 years for real wealth to be restored.
Graham Harrison, ARC Group chairman, said: “The typical sterling private client investor needs to accept that their real wealth has fallen by about 15 per cent [since 2016].
“Thinking that recovery in nominal terms means their portfolio is back on track is accepting an illusion. This may make an investor feel more comfortable when their portfolio recovers to a previous numerical high, but the real question is at what point previous purchasing power recovers.”
