What will impact advisors’ and investors’ approach to investing in 2017
Third Annual Advisor Authority Study Shows Gridlock in Washington Spikes among Top Macro Issues Advisors and Investors Believe Will Adversely Impact Portfolios
Louisville, KY – May 23, 2017 – As lawmakers continue to dominate the headlines, Washington politics is rated among the top three trends that will impact both financial advisors’ and individual investors’ approach to investing in 2017, according to the third annual Advisor Authority study conducted by Harris Poll and commissioned by Jefferson National, now operating as Nationwide’s advisory solutions business.
Advisors and investors are more likely than last year to believe that gridlock in Washington will adversely impact portfolios in the coming 12 months, and taxes continue to remain top of mind, according to this recent online survey of roughly 1,600 Registered Investment Advisors (RIAs), fee-based advisors and individual investors nationwide.
“Advisors and investors see political risks on the rise, and gridlock in Washington is the ‘new volatility,’ impacting the health of their portfolios, at the same time that it impacts everything from trade to regulations, healthcare and tax reform,” said Mitchell H. Caplan, leader of Nationwide’s advisory solutions business. “These days, politics are anything but usual, creating tremendous complexity—but also creating tremendous opportunities for expert financial advisors to create greater value. By putting clients’ best interest first with holistic advice, advisors can help manage the uncertain—and the unprecedented.”
Washington Impacts Investing
When asked to select the top three trends that will impact their approach to investing in 2017, RIAs and fee-based advisors are squarely focused on D.C., rating US Fed Policy first (32%) and regulatory changes second (29%), while Washington politics came in at a close third (28%). In last year’s study, RIAs and fee-based advisors cited ongoing volatility first at 34%, while this year volatility declined significantly to just 23%.
Meanwhile, individual investors also shared many of the same concerns about lawmakers’ impact on their approach to investing, rating Washington politics first (33%), US Fed Policy second (29%), while changes to tax code and domestic economic performance tied for third (24%).
Rising Concerns about Gridlock
When asked to select the top macro issue that will adversely impact their clients’ portfolio, RIAs and fee-based advisors rated global instability first (20%) and rising interest rates second (19%). Ongoing volatility declined significantly from the number one spot at 22% in 2016, to the number three spot at 16% in 2017. Gridlock in Washington spiked to the number four spot at 14% in 2017, from just 6% in 2016.
Meanwhile, when asked to select the top macro issue that will adversely impact their portfolio, individual investors said gridlock in Washington was first at 21%, a significant spike from just 9% in 2016. Global instability (21%) tied with gridlock for the number one issue, while taxes held steady year over year as the number two issue (17% in 2017 vs. 16% in 2016).
Tax reform is also top of mind for both advisors and investors, with advisors particularly optimistic about the impact on their clients. The vast majority of RIAs and fee-based advisors (85%) indicated that they believe the majority of their clients will benefit from the new administration’s proposed tax reform, while two thirds of individual investors (66%) believe that they will benefit.
The third annual Advisor Authority study explores the investing and advising issues confronting RIAs, fee-based advisors and investors—and the innovative techniques that they need to succeed in today’s volatile market. It features a special focus on the most successful advisors and the most affluent investors. These initial findings are to be followed by a series of reports that will be released from June through year-end.
About Advisor Authority: Methodology
The third annual Advisory Authority Survey was conducted online within the United States by Harris Poll on behalf of Jefferson National, now operating as Nationwide’s advisory solutions business, from March 13 – April 7, 2017 among 779 employed financial advisors, ages 18+ and 817 investors, ages 18+ who are primary or shared financial decision makers with investable assets greater than $100K. Among the 779 financial advisors, there were 521 Registered Investment Advisors and 258 Broker/Dealers. Among the 817 investors, there were 208 Mass Affluent, 204 Emerging High Net Worth, 204 High Net Worth and 201 Ultra High Net Worth. Investors are weighted where necessary by age by gender, race/ethnicity, region, education, income, marital status, household size, investable assets and propensity to be online to bring them in line with their actual proportions in the population.
Results of this new research are compared to results from a similar March 2016 study conducted online by Harris Poll on behalf of Jefferson National among 683 employed Financial Advisors, including 440 Independent Registered Investment Advisors and 243 Broker/Dealers and among 733 Investors.
Respondents for this survey were selected from among those who have agreed to participate in Harris Poll surveys. Because the sample is based on those who were invited to participate in the Harris Poll online research panel, no estimates of theoretical sampling error can be calculated. A complete survey method is available upon request.
About Harris Poll
Over the last 5 decades, Harris Polls have become media staples. With comprehensive experience and precise technique in public opinion polling, along with a proven track record of uncovering consumers’ motivations and behaviors, Harris Poll has gained strong brand recognition around the world. Contact us for more information.
About Jefferson National
Jefferson National, now Nationwide’s advisory solutions business is a recognized innovator of a leading tax-advantaged investing platform for RIAs, fee-based advisors and the clients they serve. Trusted partner to a network of over 4,000 advisors, Jefferson National provides greater efficiency, transparency and choice through an adaptable technology platform, award-winning distribution strategy and cost-effective servicing capabilities. Named the industry “Gold Standard” as of 2012 and winner of more than 50 industry awards, including the DMA 2010 Financial Services Company of the Year. The company serves advisors and clients nationwide, through its subsidiaries Jefferson National Life Insurance Company and Jefferson National Life Insurance Company of New York. To reach our advisor support desk, please call 1-866-WHY-FLAT (1-866-949-3528). To learn more, please visit www.jeffnat.com.
Nationwide, a Fortune 100 company based in Columbus, Ohio, is one of the largest and strongest diversified insurance and financial services organizations in the U.S. and is rated A+ by both A.M. Best and Standard & Poor’s. The company provides a full range of insurance and financial services, including auto, commercial, homeowners, farm and life insurance; public and private sector retirement plans, annuities and mutual funds; banking and mortgages; excess & surplus, specialty and surety; pet, motorcycle and boat insurance. For more information, visit www.nationwide.com.
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