Advisors have an opportunity to refocus client conversations
The factors weighing on advisors' and investors' market views have clearly been a driving force in their recent discussions. When asked about the top topics of conversation initiated by clients in the past three months, 56% of advisors pointed to market volatility, no doubt driven by the recent spikes we've seen.
In August, month–end market volatility (as measured by the CBOE VIX) rose to 19.43%, the highest since 2012. In September, month–end market volatility creeped even higher with the VIX hitting 24.53%. Volatility concerns likely fed into other popular topics of investor–initiated conversation, including portfolio performance (48% of advisors) and global events (35% of advisors).
Advisors are largely raising the same issues in the conversations they are initiating with clients. The most-cited topic was portfolio performance (42% of advisors) followed by portfolio rebalancing (38% of advisors) and global events (37% of advisors). Since all eyes were on the Federal Open Market Committee meeting in September, it also wasn’t surprising to see an uptick in the number of advisors broaching the subject of rising interest rates (34% of advisors compared to 21% in the October 2014 FPO survey).
Given the nature of these topics, advisors may be spending a lot of time in defensive mode – and that doesn’t leave much room for effective financial planning. The good news is that advisors can take control by creating the right environment for purposeful conversations.
What advisors and investors are talking about
When thinking about conversations you've had with your clients over the past three months, which of the following have been the most common topics of conversations initiated by you? Initiated by your clients? (up to three responses)
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