Generating Income Ranks #1 on Advisor Top-of-Mind Index
BOSTON, July 30, 2014 /PRNewswire/ -- Interest rates that remain near generational lows have increased anxiety levels for income-starved investors, many of whom also continue to fear a spike in market volatility that could negatively impact their investments. Advisors surveyed for Eaton Vance's latest quarterly "Advisor Top-of-Mind Index" indicated that finding reliable income sources is their clients' top financial concern, with protecting wealth from market volatility a close second.
"Clients, frustrated by the ongoing search for yield, are telling their advisors that having a consistent, reliable stream of income remains a priority, but that they are unsure where to turn," said Bob Cunha, Managing Director, Marketing and Distribution Strategy for Eaton Vance. "This is pushing advisors to look for non-traditional income generators in a market environment that, despite record-low volatility, has advisors and investors alike nervous about the next market downturn."
Kathleen Gaffney, co-director of investment grade fixed income at Eaton Vance, stresses the importance of remaining nimble and opportunistic. "Interest-rate risk has made it difficult to find value in the traditional credit markets. Having the flexibility to invest in a variety of different fixed-income sectors, as well as equities, enables investors to explore the most compelling market opportunities and quickly turn ideas into portfolio positions."
Generating income ranked 105.1 on the Advisor Top-of-Mind Index, followed closely by protecting wealth from market volatility at 102.2. Growing wealth through capital appreciation and reducing taxes ranked considerably lower on the index, at 92.3 and 78.1 respectively, further reinforcing the defensive mindset of investors.
"Clients appear to still be anxious about the markets," said Cunha. "At least for now, they are less focused on growing wealth and less worried about the tax drag on their investments. This represents an opportunity for advisors to deliver solutions to help address clients' biggest concerns right now, while positioning their portfolios for longer-term success by examining tax-efficient vehicles."
Eaton Vance's quarterly Advisor Top-of-Mind Index measures the overall importance of key issues facing financial advisors and their clients, combined with how fast these issues are increasing in importance. It is part of an ongoing study designed to help identify the key investment themes and concerns clients are commonly raising with their advisors.
Eaton Vance Advisor Top-of-Mind Index Methodology
The Advisor Top-of-Mind Index is calculated based on the findings of a survey of 208 financial advisors from a diverse group of companies. Eaton Vance contracted with a third party to conduct the online survey from June 26 – July 7, 2014. The Advisor Top-of-Mind Index uses a similar methodology as the U.S. Consumer Confidence Index* (which has no affiliation with Eaton Vance) in that it calculates a weighted average of current perceptions (40% of the index) and what advisors think about the trends (60% of the index). The index set a baseline average of 100 for April 2014. Each component measured is tracked quarterly to illustrate changes in advisor perceptions and changes in trends over time. Future surveys will sample different financial advisors and may produce different results.
Eaton Vance Corp. (NYSE: EV) is one of the oldest investment management firms in the United States with a history dating back to 1924. Eaton Vance and its affiliates managed $293.6 billion in assets as of June 30, 2014, offering individuals and institutions a broad array of investment strategies and wealth management solutions. The Company's long record of providing exemplary service, timely innovation and attractive returns through a variety of market conditions has made Eaton Vance the investment manager of choice for many of today's most discerning investors. For more information about Eaton Vance, visit eatonvance.com. Follow us on twitter @eatonvance.
* The monthly Consumer Confidence Survey®, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The consumer confidence index was started in 1967 and is benchmarked to 1985=100. The Index is calculated each month on the basis of a household survey of consumers' opinions on current conditions and future expectations of the economy. Opinions on current conditions make up 40% of the index, with expectations of future conditions comprising the remaining 60%.
SOURCE Eaton Vance Corp.