Financial advisors are casting a wary eye toward Nov. 8, when the country will make its decision between Hillary Clinton and Donald Trump.
According to the Q4 Eaton Vance Advisor Top-of-Mind Index (ATOMIX), which polls more than 1,000 financial advisors, politics, policy and how the markets will react to the election are the top concerns among advisors right now. One-quarter of advisors listed the presidential election as top of mind, and an overwhelming 95 percent indicated they believe the election will impact financial markets. Fifty-seven percent expect that impact to be negative.
Female advisors expect the election to have a larger influence on the stock market than their male counterparts, according to the study. Twenty-four percent of female advisors list the election as their most important consideration, compared with 15 percent of male advisors.
While advisors expect the election to drive market volatility, they also believe the Federal Reserve’s decision about interest rates will have the greatest impact on market volatility during the next six months. Thirty-nine percent think rates will go up before the end of the year, while 41 percent expect a rate adjustment early next year.
“Macro events have taken center stage in advisors’ minds this quarter and caused a lot of uncertainty,” wrote John Moninger, managing director of retail sales, in a press release. “Uncertainty is unsettling, but advisors can help clients navigate through periods of market volatility by discussing long-term goals and reviewing the tactical plans in place to help meet or exceed those goals.”
Advisors aren’t the only ones worried about politics and its impact on finances. Many advisors report their clients are worried about volatility, with 76 percent saying their clients are motivated by fear and 69 percent saying their clients view volatility as a risk rather than an opportunity.
Nearly all of the advisors surveyed said they are having discussions with their clients about politics.
Despite their worry about the election and its impacts, most advisors are hoping a new president will usher in moderate (51 percent) or big (40 percent) changes in government policy. The top three issues where advisors hope to see change are tax simplification, investment in national infrastructure and deficit reduction or entitlement reform. Millennial advisors largely favor policies that encourage job growth and defense.
“Advisors and their clients are anticipating the results of the election and are cognizant of the policy implications on their clients,” added Moninger. “Their opinions vary, but there is strong engagement across demographics.”
ATOMIX is calculated based on the findings of a survey of 1,002 financial advisors from a diverse group of companies. Eaton Vance contracted with a third party to conduct the online survey from Sept. 2 through Sept. 28, 2016.
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