Charles Schwab Corporation just released its semi-annual Independent Advisor Outlook Study (conducted by Koski Research), which measures the views of independent RIAs on a variety of topics. See, the press release. Nearly 1,200 independent investment advisors with more than $234 billion in total assets under management participated in the study between July 13 and July 23, 2010.
In its promotional literature, Charles Schwab describes itself as a leading provider of custodial, operational and trading support for more than 6,000 independent registered investment advisors (RIAs).
Here are some of the highlights from the Schwab Study --
While world events have caused independent investment advisors to maintain a somewhat conservative outlook, there are still a few bright spots in their forecast, according to Charles Schwab's latest survey of independent registered investment advisors. Nearly 60 percent of advisors surveyed say a double-dip recession in the U.S. is unlikely over the next six months, and more than 60 percent expect the S&P to increase during the same time period. Their optimism is tempered by the aftershocks of world events: more than 80 percent of advisors say their investment decisions have been impacted by the European debt crisis, half point to declines in the Chinese market, and 40 percent say the Gulf oil spill gave them cause for concern.
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Among other findings, nearly three-quarters of advisors surveyed approve of Federal Reserve Board chief Bernanke's leadership, and a majority thinks it unlikely that the U.S. Dollar will lose its reserve currency status over the next 24 months. Only 20 percent believe the Fed will raise interest rates over the next six months, a sharp drop from the nearly 40 percent who felt this way in January. Similarly, 28 percent expect inflation to increase, as compared to fully half of advisors who shared this sentiment in January.
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The survey also finds that advisors are more upbeat than their clients in certain areas: roughly half of advisors' clients feel less optimistic about the economy than they did in 2009. Advisors say this cautious attitude extends to their clients' financial lives: 50 percent now doubt their ability to retire on time, and 40 percent of clients are less optimistic about their investment performance than six months ago. Advisors also say that 47 percent of clients are reducing expenses, and more than half are spending less on discretionary items.
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Advisors continue to embrace asset classes, sectors and investment vehicles that have fared well in the past. As for investment vehicles, U.S. large cap stocks and fixed income are the two asset classes where advisors expect to invest more compared to January 2010. There also remains a high level of interest in investing more in large cap stocks in emerging markets.
Twenty five percent of advisors plan to use ETFs more over the next six months; alternative investments and real estate round out the top three investment vehicles of choice among advisors.
Advisors say they expect the information technology sector to perform best over the next six months. Energy, health care and consumer staples are also considered top performers; however, enthusiasm for health care has waned significantly. Twenty-nine percent of advisors ranked health care among the top three market sectors as compared to 42 percent who did so in January 2010. . .
To Read the Detailed 39-Page Schwab Independent Advisor Survey, visit: http://www.aboutschwab.com/media/pdf/advisor_outlook_10spr.pdf
Regulatory lawyer Bill Singer has analyzed and posted the latest crop of FINRA disciplinary cases
This case involves wealthy and sophisticated customers who were under no press of time to decide whether to invest; customers who invested specifically in furtherance of a desire to speculate; and a broker who did not profit from his wrongdoing and who has been fined and suspended for his violations. There is nothing in the SEC's decision to indicate why, in these circumstances, awards of restitution are appropriate under Principle 5. Indeed, the SEC's decision is incomprehensible insofar as it attempts to amplify any meaningful causal connection between Siegel's putative bad acts and the Downers' and Landrys' losses. And the SEC has cited no precedent, and we have found none, supporting restitution in a case of this sort. The SEC's judgment is fatally flawed for two reasons: First, the SEC's judgment is not supported by reasoned decisionmaking. Second, the SEC cites to no controlling precedent that includes reasoned decisionmaking supporting restitution under Principle 5 in a case of this sort. We therefore vacate the restitution order.