Growing Pains

Despite the difficult market environment, advisers are not losing clients. Sixty percent of advisers agree that the U.S. is already in a recession, but their clients are continuing to save for retirement, according to a survey released by OppenheimerFunds, Inc. It appears that clients still are focusing on the long-term goal of retirement, despite any woes in the short term.

Of the advisers surveyed, 44% reported adding five to 10 new clients to their book so far in 2008, and 25% added more than 10. The wealth of this new business is in retirement savings, OppenheimerFunds says. Advisers say 93% of their current clients still are saving for retirement, and most of the clients (92%) value diversification.

In terms of what clients are doing with their money specifically, 71% of advisers report that zero to 5% of clients are taking money out of mutual funds, OppenheimerFunds says. Of the money being taken out, 53% is in the form of exchanges and 47% are redemptions. The largest number of exchanges (30%) were into U.S. equities, followed by money market funds (27%), global equities (20%), other U.S. fixed income (13%), international fixed income (8%), and, lastly, U.S. treasuries (3%).

The market turmoil is also an opportunity for advisers: Almost all (97%) surveyed advisers have recommended to clients that current conditions could be a good buying opportunity in some areas of the market.