Advisors are using different strategies for planning at a time when the outlook for the economy and market is foggy.

Financial planners are trained to prepare their clients for unknown future events, so it probably should come as no surprise that their services are as much in demand now as ever.

But what about the present-the myriad of uncertainties that surround the present-day economy, stock market and world in general? How do advisors plan ahead in a present that is so precarious and unpredictable?

It's a reasonable question, considering all the question marks that surround issues near and dear to the hearts of advisors and their clients. Is the economy still in a recession, or in a slow recovery? Even the most respected of experts will disagree on this question. The roller coaster ways of the Dow Jones Industrial Average provide no help. Neither does the weekly procession of economic indicator reports and surveys. Even Federal Reserve Chairman Alan Greenspan seemed to throw his arms up in the air before a Congressional panel in late May. Economic signals, Greenspan told the panel, are most definitely mixed-foreshadowing a future that could be of strong growth or disappointment. Take your pick. "The economy continues to be buffeted by strong crosscurrents," he says.

In other words, even Greenspan doesn't know if we're headed toward inflation or deflation, the latter of which hasn't hit the economy since the 1930s. Greenspan also couldn't signal whether the Fed was more inclined to raise interest rates, hold them steady or lower them even further, which can't be comforting to advisors watching over their clients' fixed-income allocations.

The post-Internet bubble economy has indeed created such a warping in the historical rhythm of economic activity that advisors are still in disagreement about how they should look forward on behalf of their clients. What kind of investment returns should advisors assume nowadays for their pre-retirement clients?

History still says the "mean" is roughly 8% to 10%, and many advisors continue to abide by that. Some continue to remain confident of the economy's resiliency while others, still wary that the market isn't done compensating for the egregious overvaluations of the late 1990s, say even an expectation of 8% may be dreamy. And that is just one of the issues advisors face with the uncertain present.

"Every day you get a mixed signal, and that tends to create a sense of uncertainty in the market," says Rick Mayo, branch manager of Raymond James Financial Services Inc. in Virginia Beach, Va. "The thing is, the confused mind tends to do nothing, and our job as financial planners is to hedge as best we can and try to set up the allocation models to take that uncertainty under consideration. It's a difficult task."

So difficult, in fact, that Harold Evensky, chairman of Evensky, Brown & Katz in Coral Gables, Fla., has been trying to convince colleagues that traditional asset allocation models are going to fall far too short of clients' objectives for at least the next decade. Real returns, he says, could range between 3% and 6%, with results more likely to fall on the low side of the range. The Internet bubble, he maintains, was that bad.

"Most people seem to agree that returns will be modest," he says. "I believe most advisors have not given any substantive thought to the consequences of it."

Traditional asset allocation, with its emphasis on periodic rebalancing, amounts to what Evensky feels is chasing ghosts-too much reliance on alpha from a market that can be expected to be much more stubborn in surrendering returns. Plus, he says, "Every time I rebalance, I've got taxes."

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