He said: "We communicate with our clients every fortnight. Increasingly newspapers and "'bad' news at Ten" is making people worried." He added that some consumer investment platforms were seeing people constantly checking their portfolios many times a day, which just added to their fears.
"The recent Trump and North Korea thing is a 'My Dad is bigger than your Dad – it's of little consequence. We think this is a buying opportunity.
"We've got a structure in place that's defending it on the downside - be prepared for scary headlines for six months but I still suspect it will be a white Christmas.
"We run a fantasy fund manager team, and what you do is take risk off the table by using Sebastian Lyon, an arch passive at Troy Asset Management. He's our number one 'goalkeeper'. In 2008, Seb's fund went up – he is 25 per cent cash, he has gold, index-linked treasuries and big defensive equities. "
One option considered by many advisers for their clients is the use of multi-asset funds. Coming in a variety of formats, multi-asset funds provide the diversification that a lot of clients need, suitable for investors with less to invest.
Diversification
Andy Gadd, head of research of Lighthouse Group, said: "In this day and age, diversification is a simple investment concept because it reduces risk. In the current volatile market, various multi-asset funds will increase their cash allocation or gold allocation.
"Diversification reduces risk and it's all done within one fund, and you have one fund manager to do the allocation. When an IFA sees a multi-asset fund, it makes it easier to match that fund against your risk profile. They do do what they set out to do."
"Fixed interest is interesting at the moment as we're seeing there's a bond bubble so managers are making sure they've got short duration bonds.
Multi-asset fund managers are tailoring their funds to the prevailing currents in world markets. Mr Gadd said: "Some funds aren't holding fixed interest because of the danger fixed interest is over heating due to quantitative easing. They might hold cash or absolute returns.
"Some fund managers like Schroder have 20 per cent in cash. I don't have any reason to see that as a bad move, they're looking for better opportunities. For example, absolute return funds, it does what it says on the tin - it will always give you positive returns."
Behavioural science
Mr Steel has spent years planning for the worst scenario. he said: "Behavioural scientists will tell you the pain of losing is at least double the joy of winning. For at least the last 20 years we’ve believed in protecting investors’ wealth first, using defensive funds. After all, the most successful teams in sport build from the back, not the front.
