Fee-Based Advisers Expect Growth

Jefferson National found that 70% of fee-based advisers believe there will be a surge in the growth of fee-based advisory services.

Tax-deferral is considered “more important than ever” by 74% of advisers, especially in light of anticipated increases in both taxes for high-net-worth individuals as well as capital gains taxes once the recovery is in place, according to a release of the results from Jefferson National.

“There is a general consensus among advisers that taxes may increase and many consider tax deferral key to addressing the issue,” said Laurence Greenberg, president and CEO of Jefferson National. “In addition, tax-deferral can potentially generate higher after-tax returns for ctax-inefficient’ assets, such as REITS, bond funds, and actively managed stock funds.”

Furthermore, 85% of advisers surveyed said accumulation is critical, especially in light of the market downturn, according to Jefferson National. “Retirement ground rules used to be simple: Stay with a company, retire at 65, collect a pension and Social Security,” said Greenberg. “But faced with a failing retirement safety net, volatile markets and rising costs, a majority of advisers believe that investors need new ways to save more.”

Advisers see a future in alternative strategies and managed accounts. The majority (79%) of advisers surveyed think that there will be an increase in the use of managed accounts.

Of advisers surveyed, 70% believe that in the current market conditions, the use of more alternative investment strategies and non-correlated assets are a means of achieving greater diversification. “In today’s market, many advisers will argue that the traditional 60/40 equity and fixed-income portfolio is incomplete, and they work hard to strike a balance that includes more alternative asset classes and tactical asset management strategies,” said Greenberg.

More than 1,000 responses were collected online between March and June by Jefferson National.