Investor and advisor optimism fell at the beginning of this year for the first time in four years, according to Nationwide Advisory Solutions. Investor optimism fell from 62% in 2018 to 55%, and advisor optimism from 66% to 55%.
Nationwide’s fifth annual Advisor Authority study found that 66% of investors and 56% of RIAs and fee-based advisors expected market volatility to increase over the next 12 months, and both groups were recalibrating their financial outlook.
“More than a decade after the financial crisis of 2008, concern about volatility is again top of mind for advisors and investors alike, and uncertainty is on the rise,” Craig Hawley, head of Nationwide Advisory Solutions, said in a statement.
The number of investors who said they had an advisor is trending upward, increasing from 51% in 2016 to 62% in 2019.
The Harris Poll conducted an online study within the U.S. from Feb. 15 to March 4 among 824 adult investors — ranging from mass affluent with investable assets between $100,000 and $499,999 to ultra-high net worth with investable assets of $5 million or more — and 507 RIAs and 514 broker-dealers.
More than a quarter of investors said market volatility kept them up at night when they thought of protecting their assets and saving enough for retirement.
Headlines about lawmakers at home and abroad are top of mind — and affecting markets — according to investors. Forty-five percent cited gridlock in Washington as the factor most likely to cause volatility. Thirty-eight percent pointed to global instability, and 32% selected U.S. economic performance as the chief cause.
RIAs and fee-based advisors had a different view on the causes of market volatility. Thirty-three percent said interest rates were the No. 1 factor, 30% said gridlock in Washington and U.S. economic performance, and 29% said global instability.
Asked what would increase the likelihood of their working with an advisor over the next 12 months, 54% of investors cited market volatility as the top scenario.
The survey also asked investors about the most important benefit of working with an advisor when markets are volatile. Twenty-one percent of those with an advisor said doing so helped them stay focused on long-term goals.