Readying for the Future

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An Excerpt from the 2016 Advisor Brandscape Report

Times are increasingly tough for those who make a living by providing others with financial advice. Public figures such as Elizabeth Warren, Suze Orman and John Oliver are blatantly challenging the value that financial advisors provide for the fees and commissions they receive, going so far as to paint advisors as villains who deceitfully take money from their clients to support their own financial interests. In addition, recent actions by the Department of Labor have made the word “fiduciary” a part of the common vernacular, calling into question the very foundation of the advisor-client relationship.

Market volatility, a prolonged period of low interest rates, the upcoming presidential election and unprecedented world events such as Brexit are heightening investors’ anxieties, leaving investors with little idea of where to turn or who to trust. Yet the need for financial advice has never been greater. Advisors are now staking their claim—and their futures—on their role on providing holistic financial planning, moving from the old-school role of a broker placing orders to a trusted partner with unique objectivity and insight. The advisor community is holding fast to the belief that this approach will continue to add more value than automated robo-advisor services that, by definition, will never completely fulfill the need for human interaction. Continue reading

The Impact of Market Volatility on Investor Sentiment

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It is undeniable that emotions play a key role in the mindset of affluent investors. We track sentiment using an array of 12 emotions commonly used to describe how an investor may be feeling about the investment environment at any given time. Of the dozen emotions that respondents can choose, the top 5 most-cited sentiments for Q3 2015 were uncertainty (43%), hope (27%), optimism (24%), anxiety (18%) and confidence (14%)—a true mix of positive and negative feelings.

Investor Sentiment

Uncertainty, Anxiety and Hope: Investors React to the 2015 Downturn

To explore the impact of the market downturn in late August of last year, we reviewed results on a month-by-month basis for the top 5 selected emotions. Continue reading

Advised Investors Feeling Hopeful

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EmojisAffluent investors had an interesting start to 2015 with the S&P 500 experiencing a bumpy January, strong February and blasé March—all with only a 1% gain to show, which was better than the Dow’s 0.3% increase from the end of 2014. These investors were (and still
are) surrounded by a lot of talk about global monetary easing and uncertainty in policy direction. All the while, our $100K+ investors heard seemingly good news for consumers in the form of lower oil prices and a stronger US dollar. But as any good therapist would ask, how did all of that make affluent investors feel?

The answer is mixed. Using our Cogent Beat™ Investor portal, we examined investor sentiment and feelings about the current environment to find out how investors perceived the markets on a set of emotions ranging from ecstatic to panicked in Q1 2015. The top two-cited emotions were uncertain (35%) and hopeful (34%). Furthermore, more than one-third (38%) register at least 2 emotions, with the top combination of responses being hopeful and optimistic. Continue reading