Advisors and investors don’t see eye to eye on the direction of the markets

December 9, 2010 Categories: Economic Insights
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In general, are YOU/YOUR CLIENTS optimistic or pessimistic about capital markets broadly over the next three years?

These pie charts show how advisors see the difference between their views on the markets and their clients

Every quarter, we ask advisors across the country for their opinions on their practice, clients, products, and their plans to allocate among different asset classes. We publish these results in the Financial Professional Outlook (FPO). This quarter we explored the differences in how advisors and investors view the markets. We expected that the views would be different, but we were surprised by just how different they were.

The pie charts at the top of this post illustrate this difference, but I think it’s important to emphasize that only 7% of advisors believe their clients are optimistic about the capital markets over the next three years. This view is in stark contrast with the advisors’ own outlook – 59% of advisors are optimistic over that same period of time. The fact that the two audiences are so far apart in their perceptions of the future underscores the challenge facing you today: how to get clients to move off the sidelines, into the market and on track to a more secure retirement.

You know that the global financial crisis has left many of your clients fatigued, jaded and distrustful. That skepticism means you must now work harder to rebuild your clients’ trust in the capital markets. That trust is of paramount importance because most individual investors will almost certainly fail to achieve financial security in retirement unless they choose to engage in a sensible savings and investment plan. More than ever, financial advisors must help their clients answer the central retirement questions:

  • Are they adequately funded?
  • Are they appropriately invested to meet long-term life goals?

Head over to Helping Advisors for more information about the FPO and to view the full results of our most recent survey. After you’ve had a chance to read the report or watch the video, let us know what you think in the comments. Are you facing a similar challenge in your practice? How are you dealing with jaded investors? What can we do to help?

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