Financial Planning's Retirement Advisor Confidence Index edged down for a second straight month in December, driven largely by a sharp decline in client risk tolerance.

The index - a monthly barometer of business conditions for wealth managers - registered 49.8, down from the November level of 51.1, according to a survey of planning professionals. RACI readings of less than 50 show bearish advisor sentiment on confidence, while levels of more than 50 indicate advisor bullishness.

While many of the factors showed only modest changes, advisors reported that client risk tolerance had dropped to 42.2 from 49.2 in just one month's time, as clients fretted over fiscal cliff negotiations.

"People in our practice are generally concerned about the fiscal cliff," one advisor said, adding that clients "are currently placing a lower percentage of their total assets into equities and a higher percentage into debt securities."

The index is composed of 12 factors, including asset allocations, investment product recommendations, client recruitment and retention, economic and risk factors, taxes and plan fees. The results are used to track ongoing trends and the prevailing direction of changes in wealth management business cycles.