After two years of scrambling to protect their clients' money during the market downturn, financial advisers are eager to reinvest those assets — if only their clients would go along.
Advisers are saying, “We rode out the bad times; how do I get clients back into a game plan?” said Chris Rosato, senior vice president of strategic development for Curian Capital LLC, a provider of fee-based
separately managed accounts to financial professionals.
A desire to convince clients to embrace the market and all its volatility is a key concern for about 1,300 independent advisers that Curian surveyed recently for their views on the economy, their investment strategies and business plans for this year.
Advisers are split on whether the
recession is over, with 42% saying it is and 48% saying it hasn't ended yet. There is more agreement (88%) that their clients' are as risk-intolerant or even more so than they were last year.
The big split is over equity market volatility, with advisers estimating that 37% of their clients call that the biggest threat to their retirement plans, while just 16% of advisers see it as the biggest threat. Meanwhile, 43% of advisers said that the biggest threat to their clients is that their portfolios aren't generating enough income to last through their retirement, though they said that just 37% of their clients agree.
Mr. Rosato said that he has seen these attitudes play out anecdotally in conversations with advisers, with some telling him that they have clients who insisted on keeping money in certificates of deposit, despite being told that their assets wouldn't last through retirement in such a low-return investment.
Advisers plan to market themselves this year to pick up more clients, with 81% calling that a major goal. Another goal is to increase their efficiency so they can handle all the new business.
That all sounds about right to Vinton Fountain, president of Fountain Financial Associates. He calls himself “pretty bullish” and thinks that now is the time to be in the market to take advantage of rising values.
Mr. Fountain spoke to a group of about 100 of his clients recently. One of the themes was “think about volatility differently,” he said.
“Instead of it being something you fear, start to think of it as something that helps you achieve good results,” Mr. Fountain said.
He demonstrated his optimism recently when he acquired a portfolio of more than $80 million in assets under management from a retiring investment adviser.
