More than half of surveyed advisors think equities will rebound this year and that the year will be the beginning of a prolonged bull market, according to InspereX Advisor Pulse data released today.

But clients are not nearly so confident, which presents advisors with a prime opportunity to cement relationships with their clients, said InspereX, a technology company that is an underwriter and distributor of securities to more than 1,500 broker-dealers, institutions, asset managers, RIAs, and banks.

Fifty-three percent of advisors said the S&P equities will gain at least 10% in value by the end of the year, according to the survey of 705 financial advisors from independent broker-dealers, RIAs and banks. Fifty-one percent expect the year to mark the beginning of a long-term bull market. Only 11% expect 2023 market returns to be negative, while 36% said the stock market will be flat from where it was in late February.

“This is the ideal time for advisors to shine,” Chris Mee, managing director and head of market-linked products distribution at InspereX, said in a statement. “Giving clients peace of mind and keeping them on course during volatile markets is possibly the greatest service an advisor can provide.

“Using customized strategies that in some cases include novel downside protection solutions, focusing on long-term planning, and increasing communications all create deeper client relationships,” he added. “Interestingly, a lot of advisors said volatility is bringing new clients to their door.” Mee told advisors to “do all you can to help clients through these challenging times and maybe new clients will be coming to your door via referrals from satisfied clients. That’s how advisors are growing their business this year.”

According to the survey, advisors have become increasingly confident about the U.S .economy. On a scale of one to 10 (lowest-to-highest), advisors rate their confidence in the economy at level six, up from level five when it was last measured in June 2022.

When asked which asset classes would perform best in 2023, 48% of advisors said equities, 17% said bonds, 9% said cash and cash equivalents, and 8% said alternative assets, while only 1% mentioned cryptocurrencies.

“If 2022 wasn’t challenging enough for stock market investors, this year has been a ‘gotcha’ market – every time you start to feel confident, volatility reappears,” Mee said, “but many advisors tell us they believe there is potential for reasonable market gains this year.”

However, the advisors said their clients do not share their confidence.

Sixty percent of advisors said their clients are most worried about market volatility; 33% said inflation was their clients’ main concern, 5% said their clients were most worried about rising interest rates, and 2% said their clients’ biggest worry was rising taxes.

In addition, 62% of advisors said they think their clients are not nearly as comfortable with risk compared to what their risk tolerance indicates. “Perhaps this risk tolerance disconnect is why advisors also say that market volatility has been good for their business,” InspereX said. Seventy-six percent said market volatility has brought new clients to their door.

Advisors are increasing their businesses this year in a number of ways, including getting referrals without asking; asking for referrals from clients and strategic alliances; in-person networking; virtual education seminars; live client appreciation events; and email marketing, the survey said.