A survey by Horsesmouth LLC found that two out of three advisers expect the S&P 500 to rise between 10% to 25% in the next 12 months.
Sixty-six percent of the advisers also said they had discussed the current market drop with at least three-fourths of their clients, and 38% said they talked with nearly all of their clients. Nine percent have contacted only about a quarter of their clients, according to a press release of the results.
Clients have pondered the safety of their portfolios, advisers reported. Nearly half of advisers said at least half of their clients asked specific questions about the safety of their money market funds or general questions about portfolio insurance, according to Horsesmouth.
Advisers seem to be helping their clients stay the course. The survey showed low movement in client portfolios. According to the results, 11% of advisers said they had made changes to a half or more of their clients’ portfolios. More than 74% of advisers said they had made adjustments to 15% or less of their clients’ investments.
“It’s important to remember that financial advisers are not the ‘Wall Street’ investment bankers, traders and executives at the source of the current crisis,” said William T. Nicklin, CEO of Horsesmouth, in the release. “These are the professionals working face-to-face with the investing public to help secure the financial futures of families across the country. We are pleased to see advisers once again providing an invaluable steady hand when it is needed most.”
Opportunity in Crisis
The financial crisis can be a good opportunity for advisers to work with new clients. Almost half (48%) of advisers expect to “be bold’ in seeking new clients, and 43% expect to pursue new clients as the opportunity arises, according to the results. A much lower percentage (9%) said they expect to struggle to keep clients.
“A bear market is the ideal time for seasoned advisers to reach out to people who need help with financial planning and portfolio management,” said Sean M. Bailey, Horsesmouth editor-in-chief. “So, it’s no surprise that veteran advisers recognize an opportunity to extend their services to investors in need of guidance.”
Most advisers expect the market to rise in the next year.
According to the results, when asked to predict where the S&P 500 will be in 12 months, the largest number of advisers (45%) said it would be up about 10%. Twenty-three percent of advisers said it would be up about 25%. Some advisers (18%) think the index will stay about the same, and others expect it will decrease by 10% (11% of advisers) or even 25% (3% of advisers).
The survey of 2,275 financial advisers (all members of online service and adviser community Horsesmouth) was conducted online between October 3 and 7.