Financial advisors agree the upcoming presidential election will affect markets, they just don’t know how.
While 90 percent of advisors think the battle between the very different economic views of Donald Trump and Hillary Clinton will have an impact on the markets, 45 percent think it will be positive and 55 percent think it will be negative, according to a new survey by EatonVance.
Specifically addressing tax strategies, 39 percent of advisors believe it is too early to consider the impact of the upcoming election on tax strategy, leaving 61 percent who think their clients should at least think about it now.
Only 12 percent of advisors believe the election will have major repercussions on their business.
These results were obtained in the latest EatonVance Advisor Top-of-Mind Index, a quarterly survey of 1,000 advisors released Tuesday.
The survey also showed that investors are afraid of the future, with 82 percent of advisors reporting their clients are motivated by fear when making investment decisions, the highest percentage the survey has ever found.
“The surprise Brexit outcome, ongoing political uncertainty, the possibility of more rate hikes and a sluggish U.S. economy has thrown many advisors and their clients into a state of heightened anxiety,” says John Moninger, managing director of retail sales at EatonVance.
“While unsettling, this environment creates an opportunity for advisors to calm investors’ fears, discuss the opportunities that emerge from market volatility and reaffirm long-term investment plans,” he adds.
Advisors are most concerned about market volatility, the fourth consecutive quarter volatility came in first among advisors’ concerns. Advisors’ concerns about generating income for clients ranked second.
Despite increased anxiety about the markets, 45 percent of advisors are bullish on U.S. equities for the immediate future; 38 percent say they do not know where the markets are going and 17 percent have a bearish attitude.