The October index - a monthly barometer of business conditions for wealth managers - registered 52.6%, after readings of 51.6% in September and 48.6% in August, according to a survey of planning professionals. Advisors reported a continued rise in risk tolerance, again shifting client assets into equity-based funds, while decreasing the amount held in cash.
"When the market ticks up, as it has for most of the year, clients tend to be more optimistic about the future and are willing to place more in equities," one advisor noted. Another highlighted concerns about tax rate changes: "I expect [retirement] contributions to increase to take advantage of an expected increase in market levels and to shield income from expected higher federal income taxes."
The index reflected a two-month decline in assets held in cash - from about 50% for August to 41.7% for October - as well as another gain in risk tolerance.
RACI is comprised of 12 factors - including asset allocations, investment product recommendations, client recruitment and retention, economic and risk factors, taxes and plan fees - to track trends in wealth management business cycles.
