While financial advisors appear confident that the government will avert a headlong plummet off the “fiscal cliff,” they’re less certain about the outcome of other key legislative issues to be tackled next year that could conceivably hit them in the pocketbook, says a Financial Services Institute advisor survey released today.              

Nearly four of five financial advisors say they’re confident that the so called “fiscal cliff” -- the term used to refer to expiring tax cuts and automatic spending cuts set to take effect at the end of the year -- will be bridged by year’s end, according to the survey.

Seventy-nine percent of financial advisors polled predicted that a last-minute deal will be reached to avert the fiscal cliff. At the same time, 72 percent said that any deal will include not only higher marginal tax rates for “wealthy Americans,” but also curbs on tax deductions.

Ninety percent of advisors indicated that any proposed fiscal cliff deal should include both fundamental tax code and entitlement program reforms. Over 50 percent of those advisors said that the federal capital gains tax should stay at its current 15 percent.

The FSI also asked nearly 2,500 financial advisors their opinion on other key issues that could affect the financial services industry, including the state of the economy and taxes.

Based upon the FSI’s poll results, financial advisors queried may best be described as guarded and cautious on any proposed legislative changes that could affect the financial services industry and conceivably raise costs.        

“While financial advisors recognize the need for compromise and reforms in order to make our country financially sound, they also see how many of these significant changes will impact their clients’ ability to save for retirement, pay for their children’s education or care for aging parents,” FSI president and CEO Dale Brown said in a statement.

Advisors may be especially wary of the Department of Labor proposal to expand the definition of financial advisors’ fiduciary duty when giving a client investment advice on an individual retirement account that falls under the 1975 Employee Retirement Income Security Act of 1975.   

The number of advisors who object to the DOL’s proposal to redefine financial advisors’ fiduciary responsibility rose in 2012, with 91 percent now opposed compared to 89 percent in August and 72 percent in February. The redefinition would also ban the earning of a commission on IRA advice.

The FSI’s survey was conducted in-house with its 35,000 FSI financial advisor members e-mailed a link to the survey through a secure database to an online questionnaire. The survey was completed by 2,454 financial advisors between November 19 and 27.

The FSI is an advocacy organization for independent financial services firms and independent financial advisors.