The most recent SEI Advisor Network survey reports that financial advisor optimism is at euphoric levels, with 96% either optimistic or excited about the year ahead. 85% say that they expect investment markets to be as good or better in 2015 than they have been in 2014.
Their much abused clients–not feeling quite so chipper:
“…the survey indicates that clients do not mirror their advisors’ level of enthusiasm. Nearly a quarter of advisors surveyed said their clients were generally more pessimistic and reactionary to market events than they were in 2013.
Perhaps that wall of worry is harder for ordinary investors to climb than advisors whose primary incomes derive from the ascent.
Indeed, in line with rising market expectations, advisors surveyed expected their own businesses to expand in 2015, with 72% expecting growth over 5% and a third of advisors anticipating very large expansion in the 10 to 15% range.
But handling that growth aroused greater anxiety among the otherwise upbeat group of respondents, with close to 40% identifying finding the right client as their biggest challenge.”
Good to see that the advising community remains most worried about growing their own fees and not silly things like how to protect their clients from life-changing capital losses… Of course, they do have a perfect record of being supremely bullish when assets are perilously over-priced and hopelessly bearish after prices have retraced to the most attractive levels.
And as shown in the following chart, broad market stock valuations have only been less attractive and more perilous for holders once before in human history, and that was for a brief period in 2000 as the tech bubble collapsed. Yup, capital risk is higher today than just before the Great Crash of 1929. No wonder advisors are feeling so giddy!