Advisers predict volatility will rise

Eaton Vance survey finds greater confidence among certain advisers.
NOV 21, 2017

Advisers expect an uptick in stock-market volatility over the next six months, but they don't seem to be particularly anxious, according to a recent survey of adviser sentiment by Eaton Vance. The firm's top-of-mind index of 1,000 advisers found that while 69% felt volatility would rise, only 21% described themselves as anxious, down from 46% three months ago. They gave geopolitical issues and the U.S. political environment as the two biggest potential catalysts for the likely upswing in volatility. (More:History of presidential shocks to the stock market) When asked to describe investor sentiment, 42% of advisers categorized clients as wary, while 39% said their clients are optimistic. Despite a lower level of anxiety, advisers' concerns about managing volatility, generating income, growing capital, and taxes all rose, with volatility ranking the highest at 118.9 on the firm's index, followed closely by income generation at 117.9. (More:Prepare clients for the terror of falling markets) Younger advisers were least concerned, with 47% of millennial advisers saying they felt confident about the market, compared with 37% of all other advisers. Millennial advisers were also more likely to believe their clients share their positive outlook, with 41% reporting their clients feel confident, while only 26% of advisers from other generations reported confident clients. "Politics have increasingly dominated client conversations, and many advisers are using the opportunity to discuss and better understand their clients' motivations," said John Moninger, Eaton Vance's managing director of retail sales. "Advisers are working with clients to prepare for tax reform in addition to adjusting allocations in anticipation of tighter monetary policy." ​

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