In the Financial Professional Outlook, we ask advisors to name the most common topics of conversations with clients over the past three months – both those conversations that they initiate and those that clients initiate.
Same topics, different quarter
In the latest survey, the top advisor topic of choice was portfolio rebalancing (51%), followed by portfolio performance (40%), running out of money in retirement (29%) and tax implications of investing (29%).
It's likely there was some overlap between the rebalancing and tax conversations because the equity markets experienced very strong performance in 2013 (up over 27%),1 while bonds were weak (returning -2.02%).2
That lopsided performance meant a typical balanced portfolio of 50% stocks and 50% bonds could need to sell some equities and buy more bonds to get back to its target allocation. As a result, investors could owe taxes on their gains while potentially paying a higher tax rate year over year. That's the hard way to learn about tax-efficient investing.
For investors, advisors said their main focus was on volatility (55%), portfolio performance (35%) and concerns with government policy (34%).
1 Russell 1000 index
For more information, download the latest Financial Professional Outlook.