Advisors Optimistic About Economy, Not Regulatory Reform
Financial advisors feel the economy is improving and the outlook on Wall Street is brighter for the next six months to five years, according to a survey by Charles Schwab Institutional.
The survey of 174 of Schwab‚s advisor clients, out of a total of 6,000 advisors served by the company, found that the majority of respondents were also skeptical of government actions designed to boost investor confidence.
Less than a third felt that government regulatory action has improved investor confidence, instead saying an improving economy and international stability would do more to instill confidence.
Among the survey‚s other findings:
• Most of the advisors, 57%, have a positive market outlook over the next six months, compared to 3.4% who had a negative outlook and 35% who were undecided. Looking at a longer horizon of five years, 81% had a positive outlook
•On the economy, 63.8% felt conditions were improving, 25.9% saw the economy holding steady and 9.2% felt conditions were deteriorating.
• There was deep skepticism about the regulatory action taken against Wall Street brokerage houses. Only 18.4% felt the recent settlement in the case against alleged abuses by stock analysts would improve investor confidence. About 35% felt it would not improve confidence, and 42% were uncertain.
Planning Can Reduce Tax Liability On Restricted Stock
Advisors may need to tinker with tax strategies for clients who have been granted restricted stock.
Restricted stock is equity that can be sold at a later date after the employee has met certain service or performance requirements. This form of compensation is gaining more popularity amid the barrage of criticism about stock options, and a three-year market decline that has left many options worthless.
Microsoft Corp. became the latest to say that it will no longer award stock options and instead, issue restricted stock. More companies are expected to take similar actions in upcoming months.