Sentiment among UK and European financial advisers has fallen to its lowest level in 12 months, according to a recent global report.
The Skandia Adviser Confidence Barometer, released today, showed UK confidence in the global economy has fallen to 4.8 out of 10 in the second quarter of this year, from 5.5 in the first quarter.
Confidence in the local economy has fallen to 4.8, from 5.1 in the first quarter.
This compares with local economy confidence in Europe of 4.2 out of 10, down from 4.4 last quarter.
Similarly advisers in Europe and the UK also reported below average confidence in their local economies compared with advisers in Asia, with those based in Singapore reporting the highest confidence levels with a score of 6.8 out of 10.
Continuing volatility and the unpredictable behaviour of the global stock markets in Q2 also affected investor behaviour with over half the financial advisers surveyed reporting that their clients had become more risk averse and invested less during the period.
As in the previous quarter, the European debt crisis was cited as the biggest threat to economic growth with almost three quarters of advisers sharing this view.
Rising unemployment and government spending cuts were considered the next most likely factors to contribute to further stalling economic growth.
Marketing manager at Skandia International Phil Oxenham said: "Clearly, the fears of global contagion and continued instability within the eurozone are troubling investors far and wide, including in Singapore - despite the healthy state of their region.
"However, it is important to recognise that depressed markets create investment opportunities which can reward those willing to accept some short term volatility."
Some 450 advisers contributed to the Barometer.