Still not on the same page.

Despite the economic downturn many financial professionals still turned out this week for Schwab Impact. One of the highlights of Impact is always the Independent Advisor Outlook Study (http://www.aboutschwab.com/media/pdf/advisor_outlook_09.pdf).  Several pieces have been written about the study; Tom Lydon wrote about how Advisor Want ETFs, MSN (click here)published a story last week about how the study showed that 72% of advisors believe that the recession would be over in 12 months, even through that 81% believe that unemployment will increase over the next 6 months. Advisors sure are a happy and optimistic bunch.

However, the investor outlook, which appears in the same study, is not so rosy. The study reported:

  • 66% of investors surveyed plan on making a short-term decrease in spending (43% of advisors said that consumer spending would increase)
  • 83% plan on drawing down the same, if not more of their savings (69% of advisors said that savings would increase)
  • Only 4% of the investors surveyed plan on spending more money than they did 6 months ago

The study also shows that financial advisors plan to invest more in international and emerging markets and are less likely to invest in US equity and fixed income, while at the same time 32% of investor said that they are more concerned about their alternative investments and holdings then they were 6 months ago (53% are just as concerned).

Studies like these are great, they provide us with insight into the mind of the participants, and in this case it shows that the advisors and their clients need to talk more.

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