Saturday, March 16, 2019

Survey: CPAs, Wealth Advisors Increasingly Pessimistic about Markets, Economy

Hank Berkowitz


DC turbulence, Trump tariffs and overvalued stock market leading causes of concern. But, nation’s financial literacy gradually improving

·       Nearly 90-percent expect market correction within 12 months.
·       More than half (52%) say recession is “somewhat” or “very” likely.
·        Highest-performing firms most likely to publish, speak and do media interviews.
·        Wealth advisors are far more optimistic about their growth prospects than CPAs.
·         Millennials are the most pessimistic generation financially speaking.
·         Two-thirds of advisors (68%) believe America’s financial literacy has not improved—point finger at K-12 schools.

Norwalk, CT—March 16, 2019—Despite a record high stock market and historically low unemployment, financial advisors are taking a more cautious view of the financial landscape than they did at this time a year ago. According to the recently completed Wealth Advisor Confidence Survey conducted by HB Publishing & Marketing Company, LLC in association with The Financial Awareness Foundation and CPA Trendlines, seven out of eight CPAs and wealth advisors (87%) expect at least one more stock market correction of at least 10 percent within 12 months--up from 82 percent who felt this way in early 2018. Additionally, more than half of respondents (52%) believe a recession is “somewhat” or “very” likely within 12 months, up from 33 percent of respondents who felt this way in early 2018.

Leading causes of concern were:
1. DC turbulence,
2. Trump tariffs,
3. An overvalued stock market,
4. Fears about continued interest rate hikes, and
5. Long-term doubts about the Trump tax plan.

While more than three in four advisors (77%) expect their firms to grow in 2019, the percentage that expect “double-digit” revenue growth (i.e. more than 10%) in early 2019 declined significantly to 28 percent of respondents from 49 percent in early 2018.

“Accountants are clearly turning bearish on the economic and market outlook,” according to Rick Telberg, CEO of CPA Trendlines Research. “If there’s ever been a time for investors and taxpayers to be listening to their financial advisors, this is the time!”

Nearly 300 CPAs and independent wealth advisors participated in the 20-question online survey between January and early February 2019. No premiums, sweepstakes or other incentives were offered to encourage participants to respond—just pre-publication access to the results.

Most effective advisor communication tools

As was the case in 2018, firms that communicated frequently with clients were more likely than other firms to be optimistic about their growth prospects. As was the case in 2018, the five communication channels that respondents rated “very” or “extremely” effective were

1.      Public speaking.
2.      Writing articles for publication.
3.      Being quoted in the press.
4.      Publishing books/eBooks.
5.      Hosting webinars.

While respondents said publishing via LinkedIn had some value, most social media channels including Facebook, Twitter, Instagram and Snapchat were rated among the least effective advisor communication tools.

Nation’s financial literacy getting better, but plenty of room for improvement

Only one-third of surveyed advisors (32%) believe America’s financial literacy has improved since the 2016 elections. Nearly half of respondents (42%) believe it has remained stagnant in recent years and more than one in four (28%) believe the nation’s financial literacy is declining. Advisors overwhelmingly state that K-12 schools could make the biggest impact on improving our nation’s financial literacy—far more than any other types of educational, government or religious institutions.

“Unfortunately only 17 states require high school students to take courses in personal finance and not all teachers are financially literate themselves,” noted Valentino Sabuco, Executive Director, The Financial Awareness Foundation and co-author of the survey. “To make the situation even more challenging, many knowledgeable financial service professionals are not authorized to teach K-12 students because they don’t have teaching credentials. But, CPAs, attorneys, CFPs, wealth managers, charitable gift planners and personal investors can still make a substantial difference by joining the Improving Financial Awareness & Financial Literacy Movement,” added Sabuco.

About CPA Trendlines
With more than 200,000 followers, subscribers, and clients, CPA Trendlines is the largest independent community in the accounting profession. Its contributors are experts recognized in the profession as leading influencers, thought leaders, practitioners, professionals and advisors. CPA Trendlines provides exclusive tools, tips, trends, and guidance, plus exclusive research, insights, and commentary on the most pressing issues and fastest-changing trends. The community is dedicated to providing accounting professionals with smarter, faster, data-based decision-making to advance their careers and their organizations.

About The Financial Awareness Foundation
The Financial Awareness Foundation is a 501(c)(3) nonprofit organization whose mission is to significantly help solve a major social problem dealing with the lack of financial awareness and financial illiteracy. The Foundation serves as a nonpolitical “financial awareness advocate” for the general public, the financial services industry, nonprofits professionals and their organizations, educational institutions, municipalities, employers and the news media.

About HB Publishing & Marketing Company, LLC
Established in 1991, HB Publishing & Marketing Company, LLC is a hands-on content marketing and business development firm that helps wealth advisors, estate planners, CPAs, insurance professionals and financial industry associations dramatically improve their client communications, industry visibility, client retention and new client (or member) acquisition efforts. 

50 Washington Street, 7th Floor
Norwalk, CT 06854
(203) 852-9200

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