Eaton Vance survey reveals volatility remains top-of-mind

BOSTON, May 11, 2016 /PRNewswire/ -- Financial advisors continue to view market volatility as their top concern, but many have also learned to deal with volatility – even as their clients increasingly panic. That's the key finding from the most recent Eaton Vance Advisor Top-of-Mind Index (ATOMIX) survey, a quarterly survey of more than 1,000 U.S. financial advisors. Managing market volatility remained the top score (123.3) on the index for the third consecutive quarter.

Findings from the ninth ATOMIX survey revealed that more than half (55%) of advisors reported their concerns about volatility have grown in the last 12 months, with 53% of advisors saying they believe market volatility is the "new normal."

"Market fluctuations in 2016 have been unpredictable," said John Moninger, managing director of retail sales. "Uncertainty can be unsettling, but advisors have indicated they are growing accustomed to operating in this environment and looking for opportunities volatility presents."

However, advisors also reported their clients have not acclimated as well to market swings:

• 81% said clients are motivated by fear, up from 72% 12 months ago.
• 53% said clients are concerned about losing money due to volatile markets.  
• 62% said clients view market volatility as a risk, not an opportunity (up from 56% in Q3 2015).

"Most advisors have learned how to cope with volatility, but their clients have not," Moninger said. "The growing disparity between advisor and client perspectives highlights the importance of open, frequent communication and establishing and following a carefully constructed investment plan."

Nearly three out of 10 (28%) advisors reported volatility has strengthened their relationships with clients due to more interaction, and another 20% gained new clients due to ongoing market volatility. Of those advisors who indicated fear as the primary motivator among clients, 42% increased outbound client communication and 38% indicated clients are contacting them more frequently.

"Clear communication in uncertain markets helps strengthen client relationships," said Moninger. "Advisors play a critical role in easing client concerns and clearly articulating the benefits of long-term investment goals and what it takes to reach them."

Advisors also have a more favorable view of financial markets and the U.S. economy. They are now nearly three times as likely as their clients to be more confident in the U.S. economy than they were 12 months ago. Six in 10 (60%) advisors said the likelihood of a recession by year-end is low, up from 53% in the previous quarter. Nearly half (45%) are expecting equity markets to remain bullish over the next quarter, while only 14% expect bearish markets. 

When asked to look ahead, more than half of advisors said they believe domestic issues including Federal Reserve policy (26%) and stalled U.S. economic growth (25%) will be the primary drivers of volatility for the remainder of 2016.

Eaton Vance ATOMIX Methodology
ATOMIX is calculated based on the findings of a survey of 1,001 financial advisors from a diverse group of companies. Eaton Vance contracted with a third party to conduct the online survey from March 25 – April 18, 2016. ATOMIX 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 (NYSE: EV) is a leading global asset manager whose history dates to 1924. With offices in North America, Europe, Asia and Australia, Eaton Vance and its affiliates managed $315.1 billion in assets as of March 31, 2016, 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, visit eatonvance.com.

* 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 based on 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.

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