Wealthy U.S. Investors Less Optimistic Than Advisers

Friday, 27 Apr 2012 12:06 PM

 

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Wealthy U.S. investors are far less optimistic than financial advisers on almost all aspects of the economy, according to two studies released by Charles Schwab Corp.

The studies found that 45 percent of the advisers were bullish about the potential for the markets over the next six months, compared with just 29 percent of the high-net-worth investors.

Schwab interviewed 504 investors with at least $1 million in investable assets between January 26 and February 3, and 882 advisers who were employed by independent investment firms and whose assets are custodied at Schwab between January 24 and February 3.

"High-net-worth individuals are less optimistic ... than advisers are on things like unemployment, inflation, energy pricing, and double-dip recession," Bernie Clark, head of Schwab Advisor Services, said in an interview. "They are feeling, rightfully after the past few years, cautious."

On the other hand, 45 percent of the advisers said they were more bullish now than they were six months ago, up from 37 percent in July, but down from a post-financial-crisis 56 percent in January 2011.

A sustained market recovery would be the biggest boost to investor confidence, according to 35 percent of financial advisers, followed by 30 percent who said the biggest boost would be an end to political gridlock.

The advisers said they were more likely to invest in large- and small-cap domestic equities, as well as large- and small-cap equities in emerging markets, than they were six months ago.

Internet technology and energy companies were two favorite sectors for the advisers, followed by health care, which was similar to six months earlier. Interest in financial companies rose to fourth on the list, from fifth in July.

The one area in which high net worth investors were noticeably more optimistic than the advisers was on how confident they were that their advisers would be able to meet their investment goals in the current market.

Of the investors, 25 percent said it would be easy for their advisers to meet their goals and 32 percent said they thought it would be difficult.

On the adviser side, 12 percent said it would be easy to meet their clients' goals in the current market, while 59 percent said it would be difficult.

Ninety-three percent of the advisers added new clients in the past year, with 39 percent coming from full-service brokerage firms, 10 percent from banks, 13 percent from independent or regional broker dealers, and 18 percent from firms of other types of firms. Twenty percent had been do-it-yourself investors.

As of March 31, client assets held in custody at Schwab Advisor Services stood at $735.9 billion.

© 2014 Thomson/Reuters. All rights reserved.

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