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Financial Planning > Tax Planning

Investor-Advisor Discussions Dominated by Market Volatility, Politics: Eaton Vance

By Michael S. Fischer

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Ninety-five percent of U.S. financial advisors in Eaton Vance’s Spring 2019 Advisor Top-of-Mind Index survey said their clients had expressed interest in reallocating portfolios either to deal with or to capitalize on recent market volatility.

The ATOMIX survey showed that managing volatility was advisors’ main concern in the first quarter, coming in at 128.2, up slightly from the fourth quarter.

Generating income fell way back from being advisors’ top concern in the October-to-December period at 129.7, to 91.8.

Advisors were helping clients grow wealth, but as a goal, that too receded from a fourth-quarter index high of 114.5, to 85.

Four out of five advisors reported that the current political environment was an important part of client conversations, and three-fourths said fear was currently the chief client motivator, a big increase since the fourth quarter.

A third party conducted an online survey from Feb. 25 to Mar. 8 among 600 financial advisors from a diverse group of companies.

The survey found that many advisors continued to focus on portfolio tax efficiency, which scored 75.6 on the index, employing various tactics to mitigate clients’ tax bite:

  • 37% preferred municipal strategies
  • 32% opted for tax-managed equity strategies
  • 25% used tax-loss harvesting
  • 7% managed high capital gains

In addition, three of five advisors reported that their clients had concentrated stock positions that could trigger capital gains taxes when sold.

“While market volatility and politics can be distractions, leading advisors find time to help clients understand their personal tax situations and implement smart tax-management solutions for their portfolios,” John Moninger, managing director of sales at Eaton Vance, said in a statement.

“And the very best advisors approach tax management as a 12-month-a-year proposition, not just an April or December activity.”

Michael S. Fischer

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