Data & Research November 20, 2009

Financial Advisers Somewhat Optimistic about Economy

Financial advisers are split over whether the recession has ended, according to the latest Brinker Barometer.

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Slightly more than half (52%) of advisers surveyed by Brinker Capital said they agree with recent reports that the U.S. has emerged from the recession. However, more than half (62%) also said it’s “somewhat likely” the U.S. will encounter a double-dip recession (and 17% said it is “highly likely”).

Whether the recession has actually ended, most surveyed advisers are at least somewhat optimistic about the economy. The majority (63%) believe the U.S. economy at the end of 2010 will show significant improvement over that seen to-date. Half of the advisers are somewhat (43%) or highly (7%) confident in the outlook of the U.S. economy.

When it comes to the performance of the stock market, advisers are even more confident. More than half are somewhat (54%) or highly (5%) confident in the performance of the market. The overwhelming majority (79%) of advisers believe the Dow Jones Industrial Average will end the year above 10,000.

Most (83%) of the advisers agreed that emerging markets present greater growth possibilities than developed markets in the near-term.

While the advisers are somewhat confident on the outlook of the stock market and economy, they are most confident in the outlook of their own practice. Almost three-fourths said they are somewhat (33%) or highly (40%) confident in the outlook of their practice.

Despite the depreciation in their clients’ portfolios, advisers are sticking with their strategies. The overwhelming majority (87%) said they are staying with their asset allocation strategies, while 17% said they are trying to time the market to rebuild client assets, according to the survey.

The Brinker Barometer was conducted online by Brinker Capital in October. The results are based from responses from 247 advisers affiliated with insurance companies, independent broker/dealers, and in sole practice.

Compliance November 20, 2009

Boehner Slams Obama Administration for Advice Move

House Republican Leader John Boehner (R-Ohio) today blasted the decision by the Obama Administration to withdraw the final regulations on investment advice.

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In a statement, Boehner, a long time advocate of the advice provisions contained in the Pension Protection Act (PPA), and subsequently embodied in the advice regulations, criticized the move by the Department of Labor’s Employee Benefit Security Administration (EBSA) in rescinding the final advice regulations (see “EBSA Pulls Back Controversial Advice Mandate”). 

“It is outrageous that the Obama Administration would deny workers their right to high-quality investment advice that could help them restore valuable savings that have been lost because of this economic recession. The American people are counting on both parties in Washington to work together on real solutions to help them rebuild their nest eggs, yet the Administration’s actions today would hurt millions of families struggling in this troubled economy. That’s unacceptable,” Boehner said in a statement. 

Klein ‘Disappointed’

Congressman John Kline (R-Minnesota), the top Republican on the U.S. House Education and Labor Committee, also criticized the move.  “I am disappointed the Obama Administration has chosen to deprive working Americans of access to the high-quality, personalized investment advice they so desperately need and want,” said Kline in a statement. “The Pension Protection Act, which cleared the way for workers to receive customized retirement planning advice, was enacted by Congress with overwhelming bipartisan support. I am deeply troubled the Administration would unilaterally withdraw these regulations and deprive millions of Americans of an additional tool to help them plan for a secure retirement.” 

“With the economy languishing, the Administration should be focused on creating jobs and empowering workers. Instead, they’re investing time and energy in dismantling important worker protections. Working families deserve better,” said Kline. 

Boehner noted, “Republicans are committed to offering better solutions to help restore Americans’ savings and ensure that Washington does not stand in the way.  It’s time for Washington Democrats to end the policies that are destroying Americans’ savings and work with Republicans on better solutions to rebuild them.”  

Boehner noted that in March, House Republicans unveiled the Savings Recovery Act (H.R. 2021) to “help Americans protect and rebuild their hard-earned savings as quickly as possible,” but that “to date, the Democratic leadership in Congress has blocked this common-sense proposal, and instead advocated legislation that could drive up 401(k) costs and reduce American workers’ access to high-quality, professional investment advice.”

The investment advice bill has been under much contention, with some retirement plan advisers and other critics blasting the regulation for allowing participants to receive “conflicted advice” (see “Controversy Brews over Investment Advice Regs”).




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