Charles Schwab’s semi-annual Independent Advisor Outlook Study reveals both an optimistic and realistic outlook from more than 5,700 independent investment advisors. Here’s what they’re saying:
“Investors are confused about what’s going on – and what’s happened to their portfolios – and with good reason,” says Bernie Clark, senior vice president for Charles Schwab Advisor Services. “Now more than ever, advisors tell us that their new clients’ portfolios are in need of an overhaul.”
Where will that overhaul begin? Seventy-four percent of advisors say what must first be changed is an asset allocation mix that is inappropriate for a client’s risk level. Fifty-three percent say new clients are generally in a large number of high-cost products, and 49 percent say they are seeing too many proprietary products in new client portfolios.
How long will the downturn last?
While independent registered investment advisors remain divided on how long the recession will last, a majority agrees it will take at least three years for portfolios to recover. According to the study, 44 percent of advisors say they expect the recession to end in 2009. Others are not as optimistic; 41 percent believe the recession will extend beyond 2010.
“Advisors don’t have a GPS to guide them, but they have the experience and savvy to see that there are still potholes on the road ahead,” says Clark. “Their long-term view, reasoned outlook and steady approach will serve their clients well in this environment.”
Reassurance is everywhere