When I asked the readers of my newsletter recently to articulate their biggest professional fears, I received more than 300 messages covering a range of concerns. Here are some of the most common themes I heard.



Investor confidence in the fairness of the investment system and in the stability of the global economy has been eroding steadily, scorched by the global economic meltdown, the Madoff and Stanford Ponzi scandals - and, more recently, billions of dollars of political commercials telling everyone how bad things are in America.

Add to that the blogs from professional doomsayers, news reports leading up to the fiscal cliff and all the rest: Clients are being driven toward a belief that investing (and, indeed, the entire economy) is rigged, the future is dark and the smartest move to make is to dig a hole and hide from whatever is coming next.

Advisors know the opposite to be true: that the markets are driven by the daily efforts of millions of business owners and workers, and by billions of great choices, creative ideas and hard work contributed to business enterprises and the economy as a whole. But that message is apparently much harder to convey now than it was a decade ago, and many advisors say they are getting overwhelmed by the constant effort to keep clients from losing faith in the economic system.



Advisors worry about the possibility of another self-inflicted global economic meltdown triggered by Wall Street and the players in the derivatives markets, along with crony capitalist scammers and Ponzi schemers too tight with regulators to be properly regulated.

The advisors I talk with, and those who responded to my survey, are not totally confident (to put it mildly) that the investment banks have been definitively prevented from engineering another economic meltdown. Indeed, the same greedy incentives seem to be in place now that existed leading up to 2008.

Advisors point out that, in the public's mind, financial planner is approximately equal to money manager, money manager is equal to Wall Street, and Wall Street in full scandal mode is roughly equal to evil. When brokers and Ponzi schemers masquerading as advisors make headlines, the overall level of client trust sinks. Even worse, that happens at exactly the time when you want to reassure clients that it's never a good idea to make a long-term bet against the growth and returns of the investment markets.



I'm sure you expected this one, although it was only cited by about a third of my poll respondents. Advisors complained that they see no meaningful effort in Washington to seriously address the long-term fiscal health of the country - and the national debt in particular. Many also feel that Congress is far too addicted to special interest money and short-term thinking to make the difficult, statesmanlike choices that we need.



Someday, the Fed is going to take its foot off the brake on interest rates. When that happens, will millions of retirees who invest in bonds open their statements and see an 8% decline in one month? And will those same retirees be hit by a resurgence of inflation just when the bubble bursts?

It gets worse. Many advisors say that we (you and I, the government, the regulators) have no idea what kinds of bets have been made on bond rates in the shadowy world of derivatives, but that trillions of dollars are probably involved. This could bring down another major firm or a high-profile hedge fund, raising once again the specter of counterparty risk.



This is perhaps the least surprising item on the list. If FINRA ultimately succeeds in hijacking supervision of financial advisors, and manages to blur the distinction between fiduciary advisors and salespeople, consumers will be misled about who actually serves their best interests. At the same time, the ensuing blizzard of harassing regulation could drive many smaller advisors out of business. Despite FINRA's recent statement that it was backing off, few advisors believe it has truly ended its push to become the regulator of the RIA world.



The big tax package passed right after the new year supposedly made the tax laws permanent - but for how long? As we've already seen, the next round of partisan squabbling has already raised the specter of tax law changes.

This constantly shifting landscape causes people to lose confidence in one of the most basic services offered by financial planners: the ability to model and forecast the future. When the rules of game constantly change, it calls into question the value of long-term planning.



Are you worried about a war in the Middle East? Or what would happen if the theocratic regime in Iran decides to plant some mines in the Strait of Hormuz? What about a eurozone breakup or sovereign debt default? Or a destabilizing social collapse in Egypt?

Any of these could whack trillions off the investment markets. Advisors worry about another terrorist attack, too. Planning for so-called black swan events is especially difficult, which adds to the worry.



Even a positive black swan event can have an unexpected impact on the markets. And the world is changing so rapidly that client portfolios could get blindsided from any direction.

Consider a truly positive development: Researchers find a treatment or cure for Alzheimer's. This would be hugely beneficial for humankind, but it could bring about a collapse in the nursing home industry.

What if biotechnology advances manage to greatly extended the human life span? If people lived 25 years longer, it would cripple Social Security and Medicare, destabilize retirement plans and dramatically raise counterparty risk for insurance companies that sell annuities.

Or think about the potential for unlimited energy from new fusion technology. A fairly quick shift from a petroleum-based economy would change geopolitical dynamics, boost the economy, decimate the oil industry and foster a dramatic worldwide retooling of everything from cars to power plants. How do you shape client portfolios to plan for something like that?



The planning profession itself could go through major changes. One advisor envisions the availability of quality financial advice from online bots and smart calculators; others note that the profession is not remotely ready to shift to the more collaborative work that the next generation of clients will demand.

Will investment advice become commoditized? Will new software tools force us to re-learn our office technology? What new services will become part of the planning engagement in the future? Those answers could prove critical.



One final big risk: Advisors may focus on all the negatives, and spend their time on all the factors to worry about, and forget that the positives almost always vastly outnumber the negatives in our society and our investment markets.

This concern might be described as the antidote for everything you've read so far. Advisors talk about the danger of dwelling on all the things to worry about. They don't want to develop the habit (subconscious or otherwise) of giving advice from the perspective of fear rather than abundance.

With so many negative headlines swirling around our awareness, how many of us stop and give equal time to the potential upside surprises that the world may offer?

Bob Veres, a Financial Planning columnist, publishes the Inside Information website and newsletter for advisors at bobverescom. He's also creator of the Insider's Forum conference, set for Sept. 17-19 in Dallas. Post comments on his column at financial-planning.com/forums or send feedback to bob@bobveres.com.

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