‘Worn-Out’ Advisors’ Confidence Drops Again, Survey Finds

Financial advisors say their near- and short-term views on the economy and stock markets are negative

Advisor confidence in the economy and the stock markets fell again in September, dropping nearly 7% to about 92 from 98 in August, Rydex|SGI Advisor Benchmarking reported on Tuesday. Meanwhile U.S. consumer confidence improved slightly to 45.4% from a revised figure of 45.2% in August; these levels are close to the confidence levels of August 2009, according to the Conference Board.

All four components of the advisor index declined in September, a first for 2011, Rydex|SGI says. Advisors responding to the survey appeared to be progressively more bullish about the stock markets, highly concerned about the global economy and increasingly skeptical of U.S. monetary authorities’ handling of the U.S. market.

“Federal fiscal policy is a huge headwind to business and the economy,” said Douglas Conoway, CFP, ChFC, of the Wealth Management Group in Rochester, N.Y., in a press release “I expect stagnation until this changes.”

The monthly Rydex|SGI Advisor Confidence Index, or ACI, aims to measure the sentiments of 150 independent registered investment advisors (RIAs). (This month, data was collected Sept. 9-15.)

Advisors polled have a current economic outlook of -0.38% (vs. -12.00% last month), a six-month economic outlook of -7.39% (vs. -7.79% in August), a 12-month economic outlook of -8.45% (-6.33% in August), and a stock-market outlook of -9.52% (vs. 2.44% last month).

“If past is prologue, additional fiscal stimulus will consist of short-term solutions that will prolong, maybe even exacerbate, the current economic woes we are experiencing,” said Paul Bennett with c5 Wealth Management in Great Falls, Va., in a statement.

The ACI is down more than 25% over the last eight months. With the exception of a brief upturn in July, the benchmark has been down every month since January, according to Rydex|SGI.

The most notable change in sentiment this month, Rydex|SGI says, is advisors’ outlook for stock prices, the only measure to move forward in August (+2.44%).

Advisors, like Kenny Landgraf of Kenjol Capital Management, are “worn out.” “It’s impossible to make a fundamental investment decision,” said Landgraf, in a release. “Instead, we’re just creating bubbles in gold and Treasuries.”

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