Registered investment advisors are feeling decidedly less bullish than they were at the beginning of the year, according to the latest survey by Charles Schwab. Its online poll of more than 900 advisors whose firms’ assets are custodied at Schwab showed bullish sentiment among just 37 percent of respondents, down from 56 percent in the previous survey in January. Bearish sentiment grew from 10 percent of respondents to 22 percent, while those feeling neither bullish nor bearish grew from 35 percent to 41 percent. The fighting in Washington over the debt ceiling may have influenced the results; the poll was taken from July 26 to Aug. 5, spanning the acrimony surrounding the deal that was reached July 31.
The lowered enthusiasm for the economy is coloring advisors’ investment decisions, Schwab reports. Fewer say they want to add to equity positions in the next six months, while more want to increase cash (15 percent, up from 9 percent in January) and fixed income holdings (12 percent, up from 6 percent). Among the various asset classes, gold posted the biggest growth in advisor interest; 10 percent of advisors said they planned to invest more in the precious metal in the next six months, up from 7 percent in January (this despite the nominal price records that the metal reached this summer).
The share of advisors who see consumers saving more in the next six months is higher, while a smaller share of advisors see higher consumer spending. Still, 52 percent of advisors do not expect a double-dip recession happening in the next six month, although 59 percent felt that way in a Schwab survey in July of 2010. Higher corporate earnings expectations and a decrease in joblessness are what’s needed to improve market performance, they said.
Polled about their expectations of change in the RIA industry in the next five years:
• 88 percent of advisors said they see more companies developing products and services for RIAs;
• 81 percent said more advisors from larger wirehouses and broker/dealers will join existing RIA firms;
• 79 percent expect more advisors from wirehouses and broker/dealers will start their own RIA;
• 75 percent said more RIAs will outsource some functions;
• 73 percent expect more consolidation among RIAs.