Advisor sentiment dipped in June as equity market worries combined with a
seasonal slowdown in retirement planning activity.

Those factors caused the month’s Retirement Advisor Confidence Index — Financial Planning’s monthly barometer of business conditions for wealth managers — to fall 2 points to 52.0 this month, the lowest reading this year.

Asked to focus on May, advisors noted that clients’ retirement efforts had diminished after Tax Day. Index components related to retirement activity — including contributions to retirement plans and the total number of retirement products sold — fell precipitously from the previous month.

“Retirement products typically dip after April as the tax season rush tapers off and renews again in August,” one planner said. “May is usually a slow month for our company,” added another planner.

Meanwhile, advisors reported a decline in their clients’ risk appetite, as well as a rollback in allocations to equities. Some also noted that their clients were beginning to shift their interests away from the U.S. market and toward investing in international markets.

“We are skewing slightly more heavily toward international holdings than in the past, as the U.S. market seems relatively less attractive,” said one survey respondent. Another agreed, saying that clients “desire more international exposure.”

The index is composed of 10 factors — including asset allocations, investment product recommendations, economic and risk factors, taxes and planning fees — to track trends in wealth management business cycles. RACI readings of less than 50 indicate declines, while readings of more than 50 indicate expansion.

Maddy Perkins

Maddy Perkins

Maddy Perkins is the Assistant Managing Editor for Financial Planning, Bank Investment Consultant and On Wall Street.