Investors are growing more greedy, which is surpassing fear as the top client motivator for the first time since inception of the Eaton Vance Advisor Top-of-Mind Index (ATOMIX), changing advisor priorities.
That’s according to the Q4 2018 iteration of ATOMIX, which says that generating income for clients is now the top concern of financial advisors, ranking 129.7 on ATOMIX after having risen 24% since the second quarter.
Advisors are also focusing on helping clients grow wealth; that goal hit a new Index high of 114.5, after its own substantial rise of 14% since Q2.
And with greed as the motivating factor, some advisors, the report says, are speculating about the high level of investor confidence.
“While our survey results indicated a sense of optimism about equity markets coming into the fourth quarter, October has brought some challenges resulting in few places to hide,” John Moninger, managing director of retail sales, says in a statement.
Moninger adds, “Advanced advisors are taking advantage of market dips to identify longer-term value, while preparing clients for rising rates. Now more than ever, clients need sound guidance, while the markets are sending mixed messages.”
Still, income and growth in wealth aren’t the only objectives on advisors’ minds, the index reveals; they’re also focused on helping clients manage market volatility, a goal that only marginally increased to 127.7 on the ATOMIX from Q2. Key catalysts of market volatility included geopolitical issues and conflicts (28%), the U.S. political environment (26%) and the Fed’s rate-hike decisions (22%), the report says.
But not all clients are brimming over with confidence; advisors reported some of their clients still lack confidence, with 44% describing their clients as “anxious” about their investments. In addition, 78% of advisors reported having discussions with some clients about a looming recession; 60% expect volatility to rise in the next six months; and 59% believe tariff-related actions globally will trigger increased volatility.
Advisors are also taking action on short-duration strategies and tax management, in anticipation of coming interest rate hikes and the effects of tax reform. Many are turning to bonds, although of shorter duration, and looking to emerging markets for what they can bring to portfolios.
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