Despite strong market returns in 2009, a majority of advisers believe their clients will have to work three to five years longer than they had planned in order to maintain their standard of living in retirement, a recent survey revealed.
Brinker Capital's first-quarter 2010 Brinker Barometer, a gauge of financial adviser confidence and sentiment regarding the economy, retirement savings, investing and market performance in 2009 and 2010, was conducted online in February and March 2010 and is based on the responses of 247 advisers affiliated with insurance companies, independent broker-dealers and in sole practice.
Although the majority of advisers were satisfied with 2009's performance, the study highlighted that 63% of advisers said that up to 75% of their clients will have to work from three to five years longer than expected to make their retirements viable after suffering losses in the financial meltdown.
"Clearly 2009 ended on a far more positive note than it began, which meant that financial advisers are generally optimistic about the way the markets and U.S. economy were trending than they had for quite some time," said John Coyne, the president of Brinker Capital, of Berwyn, Pa., in a press release Monday. "Their general level of optimism notwithstanding, the majority of advisers note that their clients still have to delay retirement plans to make up a savings shortfall, and concerns about potential tax increases still abound."
About 61% of advisers said they're either "highly confident" or "somewhat confident" about the nation's economic outlook; 67% said they're "highly confident" or "somewhat confident" about 2010 market performance; and 93% indicate they're "highly confident" or "somewhat confident" about the future of their practices.
In terms of investing strategy, 88% of advisers believe that emerging markets will outperform the U.S. again in 2010, while only 34% plan on allocating additional assets to exchange-traded funds. Slightly more than three-quarters are allocating additional assets to guaranteed insurance products and 56% are allocating additional assets to cash or other short-term strategies.
Nonetheless, there is still uncertainty ahead, which advisers fear will cause some pain. Topping the list are tax increases, followed by budget deficit, double-dip recession, another financial meltdown and health-care reform.