While investors may want to make changes in the face of a volatile stock market, most financial advisers don't move assets around during challenging times.
While investors may want to make changes in the face of a volatile stock market, most financial advisers don't move assets around during challenging times.
In a recent survey of 250 advisers, SEI Investments Co., an Oaks, Pa.-based asset management firm, found that during tough times, just 12% of advisers said they would move assets if pressured by investors. Of those advisers, one third said that they would choose a more conservative asset allocation, and two-thirds said they would move investments to cash or money market funds.
Most advisers choose less drastic strategies. More than 46% of advisers said that they worked with clients to re-evaluate their goals and assess risk tolerance.
A full 31% said that they met with clients more frequently during such periods, and 11% said that they sent more education materials to clients.
And clients heed their advice for the most part.
About 78% of advisers said that their clients were generally accepting of their advice. Nearly 22% said that clients had questioned, resisted or refused to take the advice.
"The advisers are not blindly saying, 'Stay the course,' without considering what is going on," said Kevin Crowe, senior managing director at SEI. "It's refreshing to know that they are not changing investments based on short-term volatility."
Advisers in general reported seeking additional information from investment service providers to help educate and inform clients about market trends and implications.
Other factors can lead clients to seek changes in their investment strategy, including life-changing events, pending retirement and changes in income needs, SEI noted.
The poll was administered through the SEI Advisor Network at a meeting held in May.
As of March 31, through its subsidiaries and partnerships, SEI administered $424 billion in mutual fund and pooled assets, and managed $185 billion in assets.
