Adviser Sentiment is Positive for Year Ahead

Asked why their clients don’t save enough for retirement, financial advisers most commonly cited procrastination, followed by debt, their extravagant lifestyle, children’s college education needs, and a lack of knowledge or concern, according to the Brinker Barometer, a gauge of financial adviser confidence and sentiment, by wealth management firm Brinker Capital.

Economic Outlook

However, for those that are saving and investing, advisers were fairly optimistic about the economy and the markets, although economic sentiment was higher.

Seventy-two percent of advisers surveyed are either “highly confident” or “somewhat confident” about their economic outlook; however, financial advisers who work the insurance channel have a somewhat rosier outlook than their independent adviser peers, with 75% vs. 64%%, respectively, indicating high or some confidence. Insurance advisers were also a little more optimistic than independent advisers about their market outlook: 66% of insurance advisers said they were either “highly confident” or “somewhat confident” about market performance, compared to 59.5% of independent advisers.

Despite this positive outlook, advisers are concerned about geopolitical development and stock market volatility, which they listed as their two biggest worries in what issues have the potential to negatively impact client accounts. Recession ranked as the third major concern for insurance advisers, while independent advisers said oil prices, followed by recession, were their next greatest concerns.

Investment Vehicles

Advisers and clients are beginning to look away from individual stocks and bonds, the barometer showed, with those investment vehicles topping the list as “losing favor” by both insurance and independent advisers (34% and 28%, respectively).

However, while insurance advisers and independent advisers agreed on the three up-and-coming investment vehicles, they ordered and weighted them differently. Independent advisers are turning to alternative investments (52%), exchange-traded funds (47%), and stock mutual funds (45%), in order of preference, while insurance advisers voted for alternative investments (54%), stock mutual funds (50%), and exchange-traded funds (41%).