As the market slows down, advisor confidence seems to be slowing along with clients' confidence.
That's according to Financial Planning's Retirement Advisor Confidence Index, a monthly snapshot of business conditions for wealth managers.
Though risk tolerance rose slightly, the index dropped to 57 in June after reaching 59 in May.
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Some of the drop is situational and should not be surprising: contributions to retirement plans dropped 9.3 percent after a surge in April and May as customers tried to meet their contribution levels before filing their taxes.
In addition, the total number of retirement products advisors sold to customers also slid 8 percent after hitting new highs in the previous two months.
Yet at the same time, risk tolerance rose slightly, and while advisors seemed to be easing off higher allocations to equities, they showed little change on allocations to cash and bonds.
"Our clients overall are becoming more and more concerned about U.S. bonds as interest rates could start rising," one advisor said. "This has driven a higher percentage overall of their investments to stocks and has forced us to look at other bonds, such as emerging market bonds, and alternative asset classes."
The index uses 10 factors – including asset allocations, investment product recommendations, economic and risk factors, taxes and planning fees — to track trends in wealth management business cycles. Index readings of less than 50 indicate a decline relative to the prior month, while more than 50 indicate an expansion.
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