Advisers’ two biggest pieces of advice for clients in 2012 is continued volatility (cited by 40%) and slow economic growth (15%), the latest survey of U.S. financial advisers by Russell Investments found. The survey was conducted among 300 advisers at 132 firms nationwide.
Sixty-three percent said that market volatility has dominated their conversations with clients in the past six months. As a result, 78% have been making more outbound calls, 52% are holding more client meetings and 49% are receiving more inbound calls from clients.
Forty-four percent report that portfolio performance has been one of the key issues their clients have raised in the past three months, up from 32% in September and 26% in June. As well, 44% said their clients are interested in discussing the ramifications of global events.
Advisers themselves are less optimistic about the markets over the next three years, with 66% bullish, down from 72% in September.
In this environment, 34% of advisers have made business growth their top priority for 2012, followed by 20% focusing more on clients and 19% improving client communication.
As far as reallocation is concerned, 61% of advisers are adjusting the portfolios of clients with short time horizons, and 48% are making adjustments for clients with long-term outlooks.
In terms of external resources they are relying on to have these discussions with clients, 23% are using tools from their broker-dealer home office, and 20% are using tools from mutual fund companies. Forty percent rely on their own resources and analysis.
“Advisers know that volatility and the continued uncertainty surrounding issues around the globe are battering investors’ views on the markets,” said Ryan Parker, managing director, national accounts and business development for Russell’s U.S. adviser-sold business. “Communication is key for allaying clients’ fears, but it also presents some challenges—most notably, advisers must decide carefully how to manage their time effectively.
“Interestingly, while advisers are working to help ease investor concerns, their own sentiments remain quite positive—so much so that they are turning their focus to business growth and expansion in the coming year,” Parker added.
