Re­tire­ment Ad­vi­sor Con­fi­dence In­dex

Ro­bust eco­nomic per­for­mance and busi­ness earn­ings push trade war fears out of the spot­light, ad­vi­sors say.

Financial Planning - - CONTENTS - By Harry Ter­ris

Solid eco­nomic num­bers and cor­po­rate earn­ings re­ports are help­ing to sup­port client sen­ti­ment and in­vest­ment flows, ad­vi­sors say.

Client al­lo­ca­tions to eq­ui­ties in­creased sharply and po­si­tions in bonds also grew, ac­cord­ing to the lat­est Re­tire­ment Ad­vi­sor Con­fi­dence In­dex — Fi­nan­cial Plan­ning’s monthly barom­e­ter of busi­ness con­di­tions for wealth man­agers. The com­po­nent track­ing client hold­ings of stocks jumped 6 points to 58.7 and the com­po­nent for bond hold­ings rose 2.9 points to 52.4. Read­ings be­low 50 in­di­cate a de­cline and read­ings above 50 in­di­cate an in­crease.

“Peo­ple are be­com­ing more en­cour­aged by a seem­ingly im­prov­ing econ­omy,” one ad­vi­sor says, echo­ing peers who re­port that brisk eco­nomic ac­tiv­ity and healthy busi­ness earn­ings are feed­ing op­ti­mism.

Ad­vi­sors say that in­vest­ment flows are also be­ing pro­pelled by gains in em­ploy­ment and per­sonal in­come that are adding to the pool of in­vestable as­sets. “Eco­nomic growth is lead­ing to new en­rollees in the work­force and more par­tic­i­pants are con­tribut­ing,” one ad­vi­sor says.

Fur­ther, ad­vi­sors say that bet­ter per­sonal fi­nan­cial prac­tices are en­abling clients to fo­cus on sav­ing and plan­ning for the fu­ture. One ad­vi­sor at­tributes in­creased in­ter­est in new re­tire­ment ac­counts to clients’ adop­tion of “more ag­gres­sive sav­ing-to­ward-re­tire­ment goals.”

The in­creases in the in­dex com­po­nents track­ing flows into stocks and bonds helped swing the com­pos­ite into pos­i­tive ter­ri­tory with a gain of 2.3 points to 52.1. In ad­di­tion to as­set al­lo­ca­tion, the com­pos­ite tracks in­vest­ment prod­uct se­lec­tion and sales, plan­ning fees, new re­tire­ment plan en­rollees, client risk tol­er­ance, and client tax li­a­bil­ity.

The com­pos­ite was also helped by the com­po­nent track­ing con­tri­bu­tions to re­tire­ment plans, which rose 0.4 points to 55.5, con­so­nant with the read­ings on stock and bond hold­ings. Ad­vi­sors cite sev­eral ad­di­tional fac­tors that are sup­port­ing re­tire­ment in­vest­ment flows in their prac­tices, in­clud­ing a rise in the num­ber of clients at or near re­tire­ment age.

One ad­vi­sor says that busi­ness-owner clients now have a clearer pic­ture of their likely earn­ings for the full year and

are there­fore more com­fort­able al­lo­cat­ing money to re­tire­ment port­fo­lios. The in­dex com­po­nent track­ing fees for re­tire­ment ser­vices added 2.4 points to 55.1, con­sis­tent with trends in as­sets un­der man­age­ment in­di­cated by read­ings on con­tri­bu­tions and as­set al­lo­ca­tions.

While ad­vi­sors say that over­all con­fi­dence in the econ­omy is help­ing to drive in­vest­ment flows, the in­dex sig­naled a per­sis­tent un­der­cur­rent of client ner­vous­ness. At 48, the com­po­nent track­ing client risk tol­er­ance regis­tered its sixth con­sec­u­tive month in neg­a­tive ter­ri­tory, and con­tin­ued to weigh down the com­pos­ite.

Ad­vi­sors say that un­ease con­tin­ues to cen­ter around trade ten­sions, “dys­func­tion in Wash­ing­ton,” and volatile re­la­tions be­tween the U.S. and other coun­tries around the world.

Source: Source­me­dia Re­search

Source: Source­me­dia Re­search

Source: Source­me­dia Re­search

Source: Source­me­dia Re­search

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.