This caused the latest Retirement Advisor Confidence Index — Financial Planning’s monthly barometer of business conditions for wealth managers — to remain in positive territory, falling just half a point to 54.
Asked about November activity, advisors noted their clients showed greater focus on their retirement savings and were more willing to take on risk. Perceived client risk tolerance rose 5.3 points to 52.1 and back into positive territory for the first time in six months.
However, advisors said their clients lessened their equity loads a bit: Client assets allocated to equities fell 3.6 points to 59.6, still remaining in positive territory.
One advisor wrote that many clients are “looking to max out employer matches by the end of the year.” Another advisor said his clients’ investments in retirement were up because “October was a really good month and November stayed steady.”
CLIENTS COME OUT OF THEIR SHELLS
Other advisors noted that the market’s recovery from the August slowdown brought hesitant clients out of their shells: “There has been improvement in several markets, and clients are more optimistic with their investments. This has been a big help with our retirement business operations,” wrote one advisor.
Many retirement contributions were motivated by year-end tax planning. Advisors reported increases into IRAs in particular, with one advisor noting an increase in IRA sales. However, while advisors said their clients continued to increase their contributions, they noted a slight dip in overall sales of retirement products. Such activity fell 2.5 points to 55.9, but also remain in positive territory.
Advisors also noted clients were concerned about what may happen when the Fed raises interest rates. “Concern with rising interest rates and geopolitical factors are causing clients to favor high credit over returns,” one advisor said.
Another wrote: “The uncertainty of the Fed is still weighing on clients.”
The Retirement Advisor Confidence 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. RACI readings below 50 indicate deteriorating business conditions, while readings over 50 indicate improvements.