Financial Advisors Opting For Long-Term Strategies; Avoid Reactionary Moves

NEW YORK, July 18, 2012 /PRNewswire/ -- Most financial advisors are advocating clients not make wholesale changes to their portfolios despite the recent economic volatility, a survey by kasina finds. kasina, a consultant and strategic advisor to the asset management industry, today released the results of their biannual FA vision survey of US financial advisors. More than 2,300 financial advisors across the country were asked about their top concerns and recommended courses of action. The study indicated that nearly half favored "staying the course" over significant reallocation in alternatives, equities, fixed income and cash.

Financial Advisors were asked to determine which of the following events presented the biggest possible impact to their clients' portfolios: the European debt crisis, oil prices, the 2012 US presidential election, unemployment, or another event. Close to half (47 percent) said that the debt crisis in Europe would have the biggest impact. They were then given a choice as to which action they recommended to clients in the face of that event: increase alternatives, increase cash, increase equities, increase fixed income, or no change. Close to half of those polled (42 percent) said they recommended no change to their clients' portfolios.

"The survey clearly tells us that financial advisors are advocating for risk management and long-term returns in the face of volatility," said Steven Miyao, CEO of kasina. "While many financial advisors indicated that the Eurozone issues continue to be the largest overhang, most are committed to building long-term platforms that rise above the short-term noise we're currently experiencing."

Those who indicated they would not recommend change stressed that their portfolios were already positioned to avoid responding to short-term bumps in the road. The survey showed that most advisors believe that the Europe Debt Crisis is the most important event, yet they are not convinced that any single asset class offers a better risk profile.  As referenced in the following graphs, most advisors indicated they would be willing to explore alternatives or keep their money in cash. A majority of the respondents pointed to the importance of maintaining a well-diversified portfolio. A geographic breakdown did not show statistically significant deviations, suggesting that advisor sentiment across the country remains fairly constant.

Mr. Miyao concluded: "Verbatim responses indicated that many financial advisors have already priced in these events and are looking for opportunities as the US election cycle and Eurozone crisis continue to unfold."

(Photo: http://photos.prnewswire.com/prnh/20120718/NY42084-a )

(Photo: http://photos.prnewswire.com/prnh/20120718/NY42084-b )

About kasina

kasina's commitment to innovating distribution in the financial services industry has made it one of the most influential strategy consulting firms in its sector. kasina works with a wide variety of clients from five continents, including firms representing 90% of the U.S.'s total assets under management. An overview of services offered by kasina is available at www.kasina.com.

David Barak, kasina, (347) 338-0066; [email protected]

SOURCE kasina