Concerns about the global economy are pushing clients to become increasingly hesitant and leading advisors to shift more toward cash and away from equities.

These are among the factors that caused July’s Retirement Advisor Confidence Index — Financial Planning’s monthly barometer of business conditions for wealth managers — to fall 2.5 points to 49.5, a 12 month low-point for the index as it shifts to negative territory.

Asked to focus on June activity, advisors noted clients’ increased uneasiness with the global economy - particularly the events concerning Greece. Advisors reported that their clients have become more hesitant to take on portfolio risk, leading to an 8.9-point drop in client risk appetite from the month before.

Some advisors attributed the drop in risk tolerance to market volatility, with one advisor adding that recent market conditions affected “investors’ comfort levels, which in turn impacts how much risk they’re will[ing] to take.”

Clients shied away from stocks in favor of cash, reflected in a 5.3-point drop in assets allocated toward equities and a 7.6-point increase in cash allocations. As one advisor noted, “The developments in Greece, China and high U.S. equity prices are adding to some instability and caution to the summer months.”

Another advisor added, “The probability of an eventual Greek default has caused cessation of purchases until there is more clarity.”

But some advisors are concerned that their clients are missing out. One advisor noted that while the situation in Greece is creating buying opportunities in the stock market, clients “are a bit gun-shy to jump in right now.” One advisor said clients might be shying away from equities because of higher prices.

Despite falling confidence, advisors reported that their clients continue to contribute to their retirement plans. Total contributions rose 1.8 points to 56.9, following a significant post-tax season drop the month before. However, the jump in contributions may have been driven by fear. As one advisor noted, “Clients seem to be trying to contribute as much as they can for retirement” because of “anxiety over having enough savings for an adequate retirement.”

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 business cycles. Readings of less than 50 indicate deteriorating business conditions, while higher than 50 indicate improvements.