Two issues-the real estate bubble and the credit crunch-tied for third, with 49% of advisors saying they would have a significant impact. The annual survey, in which 201 advisors participated, covered a wide range of topics related to advisory businesses and the economy.
Although a small minority of planners (about 15%) are very concerned about the possibility of a recession, more than half are somewhat concerned about that possibility. For those planners who think a recession is likely, a shift of clients' assets to more conservative investments, including money markets and investment grade corporate bonds, is in order, the respondents say.
If the dollar continues to erode, advisors plan to shift clients into international funds for long-term investing. If interest-rate reductions spur fears of inflation, most would not change client portfolios, but a significant portion, 20%, would shift more to equity holdings.
Major concerns for 2008 among respondents are the real estate bubble (76%), credit crunch (73%) and the 2008 presidential election (70%).
Almost half of advisors responding feel female investors are the best targets for business, while 42% believe Generation X individuals are the best prospects.
OppenheimerFunds economist Brian Levitt says 2008 is unlikely to bring a deep recession, and the current slowdown should be relatively short-lived.