Fidelity one of the world’s largest money managers is recommending clients to allocate a significant percentage of their portfolio in cash deposits and precious metals to protect themselves against systemic risk.
Ian Spreadbury who manages over £4bn of client monies told the telegraph that systemic risk is alive in the system and investors should be aware and protect their portfolios.
Spreadbury believes the world is swimming in an ocean of debt and when interest rates rise mortgages in particular will become unserviceable. He points out that many mortgages will be defaulted on and in such an environment banks will suffer significant losses which could lead to systemic crisis across the global financial system.
Spreadbury is not the first high profile money manager to warn of an impending financial crisis. Goldman Sachs, Andrew Wilson recently gave a similar warning and HSBC’s chief economist likened the world economy to the Titanic.
Spreadbury also took time to explain that the £85,000 compensation scheme is not pre funded and should banks fail in the future the government is unlikely to prop up insolvent banks, leaving clients’ deposits to be bail-in.
He suggested that customers should allocate a percentage of their portfolio in gold and silver as the next financial crisis will happened within the next 5 years rather than 10.