As low interest rates continue to hit savings accounts, Independent Financial Advisers (IFAs) are expecting a rush for riskier assets.

Research from Prudential has revealed that 72 per cent of IFAs are expecting an increase in the number of clients looking to invest in equity based investments over the next 12 months.

While interest rates have been gradually falling since the Bank of England reduced the base rate to a record low of 0.5 per cent 10 months ago, the stock market has rallied, finishing 2009 well above 5000.

However, an air of caution remains, as 73 per cent of IFAs expect their clients to choose investment funds that are cautious managed, while 66 per cent are expecting to see investment in defensive funds.

A further 70 per cent of IFAs questioned believe that investors will be looking to spread the risk by buying into multi-manager funds.

Commenting, Andy Brown, director of investment funds at Prudential said: “Given the performance of the markets in the second half of last year coupled with the ongoing poor rate of returns for cash based savings, it is perhaps unsurprising that IFAs expect to see clients looking to return to the stock market and buy into equity based investments in 2010.

“However, in reality not all equities will show equal growth over the coming 12 months and choosing the right time to invest in the right asset classes is key,” he adds.

“We share the views of the IFAs surveyed and believe that good fund managers and balanced portfolios will do well in 2010 and beyond as investors look to build portfolios to deliver both performance and greater security.”

The news comes after the Investment Management Association’s latest figures, which show 2009 was a record year for investment funds under management with £25.8billion worth of net retail sales.

© Fair Investment Company Ltd