Advisors and financial professionals are bracing for a milder recession, according to an annual survey by Nationwide Mutual Insurance’s Retirement Institute.
Of 511 advisors, including registered investment managers, broker-dealers and telecom brokers, 65% predict a recession this year. According to the Nationwide Retirement Institute’s annual Advisor Authority report, almost half (42%) expect a recession to be “short and shallow”, and about a quarter (23%) expect a severe and severe recession characterized by stagflation and instability. We anticipate a prolonged market downturn.
Advisors’ forecasts for a recession are strong, but not as strong as The Conference Board’s forecast of 99% of recessions within the next 12 months, in its latest update on April 12th. February sees a ‘short and shallow’ recession amid rising interest rates and market volatility.
According to Nationwide researchers, the consequences of a recession may not necessarily be bad for advisors when it comes to interacting with clients. are often when they need it most, they write.
“Whether today’s environment evolves into a full-blown financial crisis or not, advisors are in an excellent position to guide their clients forward as calmly as they have experienced turbulent moments in the past.” Investments The investigation said in a report statement.
knowing is half the battle
According to Nationwide, just under half of advisors prepare their clients for impending financial hardship. On a list of questions that advisors can check off all that apply, 43% educate clients on market cycles, 43% employ strategies to protect assets from market risk, and another 43% assess client needs. The survey found that they are listening to their concerns.
Whether advisors interact with investors or not, that group is slightly less concerned about recession than the majority. The survey, conducted by Harris Poll in January, included 789 investors with more than $10,000 in investable assets. Nationwide reports that 39% of those investors believe the US is already in financial crisis, and 30% believe the US is approaching a financial crisis.
Within that group, those with advisors were less nervous (31% vs. 46%) and more confident about their ability to protect their finances in the event of another financial crisis. (40% vs. 26%). according to the nation.
Having a financial plan for a market downturn is even more important for investors, with 88% saying that having an investment strategy gives them the confidence to make the right investment decisions even during an extreme financial crisis. He said he got it.
“It’s clear that having a plan and a trusted advisor makes a difference,” says Hackett. “Advisors should encourage clients to stay focused on their long-term goals as they help them plan and consider protective solutions.”
Hackett noted that Nationwide’s own economic team is forecasting “a gradual, shallow, short recession at the moment.” He said, “It is too early to call today’s environment a crisis. have been obtained.”
When it comes to general market volatility, the results show that nearly two-thirds (65%) of advisors believe the market will become more volatile over the next 12 months. Advisors expect inflation (33%), interest rates (27%) and recession (24%) to be the most common causes of that volatility.
Nationwide’s survey of advisors and financial professionals included 274 RIAs, 175 broker/dealers, 128 wirehouses, and 55 other financial professionals, according to the Columbus, Ohio-based firm. I was. Among the investors are 209 with investable income in the $10,000 to $100,000 range, 203 in the $100,000 to $499,000 range, 167 in the $500,000 to $999,000 range, and $1 million to $499,000. There were 106 in the $5 million range and 104 in the $5 million or less range. more.