Majority of RIAs and Fee-Based Advisors Say Stock Market Will Rise--but Washington Politics will Cause Ongoing Volatility
Louisville, KY—(February 27, 2017)— Jefferson National, a leading distributor of innovative tax-advantaged investing solutions for Registered Investment Advisors (RIAs), fee-based advisors and the clients they serve, announced results from its latest survey on the new Administration’s impact on advisor sentiment and approach to investing. While nearly three-fourths (70%) of advisors say markets will increase over the next 12 months, the vast majority (80%) believe changes in Washington will drive ongoing volatility. Many are taking action by investing more aggressively and more tactically, as well as by adjusting allocations in response to proposed policies. Tax policy is also a key consideration.
“Most RIAs and fee-based advisors are optimistic, but they are bracing for turbulent markets in the face of many unknowns, as Washington lawmakers address a range of key economic and political issues,” says Laurence Greenberg, President of Jefferson National. “While it may be difficult to predict outcomes in times of change, advisors and their clients can benefit by controlling what they can—taking a holistic approach to planning, keeping costs low, and investing for greater tax-efficiency. And as more advisors respond by using tactical management, proactively managing risk and adjusting portfolio allocations, tax-advantaged investing becomes increasingly important.”
More than 40% of RIAs and fee-based advisors surveyed have already adjusted clients’ portfolios in response to the new administration’s proposed policies. Of those who have made adjustments, 72% have invested more aggressively and 83% have invested more tactically. Likewise, more than three-fourths (78%) have adjusted holdings of sectors or securities that are expected to benefit under the new policies, and nearly two-thirds (61%) have adjusted the interest rate sensitivity of bond portfolios.
Tax reform is top of mind for advisors and clients. Advisors say that tax reform (63%) is the proposed policy which is most likely to cause them to adjust or plan to adjust clients’ portfolios. This is followed closely by deregulation (60%) and infrastructure investment (56%), while trade policy (42%) and immigration policy (11%) are less likely to have an impact. Likewise, tax reform is the proposed policy that clients want to discuss most often with respect to their portfolios. At 53%, tax reform is cited roughly twice as often as deregulation, infrastructure investment, trade policy and immigration. This aligns with the findings of Jefferson National’s most recent Advisor Authority study of more than 1,300 RIAs, fee-based advisors and individual investors nationwide, which cited taxes among investor’s top three financial concerns—and the number-one financial concern of Ultra-High Net Worth Investors.
To view more findings from Jefferson National’s Washington Impact Survey, financial professionals can download this infographic: http://learn.jeffnat.com/washington-impact
This Washington Impact Survey was conducted online by Jefferson National from February 2, 2017 - February 20, 2017. A total of 292 RIAs and fee-based financial advisors completed the survey for a confidence level of 90% +/- 5%.