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Politics cause sleepless nights for investors, says Hartford Funds survey

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New data released today by Hartford Funds reveals that advisors believe anxiety negatively impacted investor decision making over the last 12 months.

The survey of more than 200 advisors also shows that despite political uncertainty both domestically and globally, advisors’ clients still have appetite to invest new dollars.
 
“Investors and advisors witnessed significant geopolitical events in the last year, all of which can impact decision-making,” says John Diehl, senior vice president of Strategic Markets for Hartford Funds. “Our survey clearly demonstrates that helping clients better understand their risk tolerance and how anxiety can lead to poor investment decisions is more important now than ever before.”
 
Most advisors (62 per cent) agree client anxiety led to poor investment decisions last year. Measuring current concerns, politics top the list of reasons advisors believe are currently keeping clients awake at night. Domestic politics are causing more sleepless nights for clients (37 per cent) than international politics (14 per cent), according to advisors. Meanwhile, advisors were more likely to say they are sleeping soundly (31 per cent) than being kept awake by domestic (20 per cent) or international politics (21 per cent).
 
“Advisors typically see less reason for concern in times of political disruption because they are able to tune out the noise; they understand that there’s less of a connection between politics and market cycles,” says Diehl. “Sharing data to this effect and discussing your clients’ risk tolerance can help ease their minds, as well.”
 
Comparing confidence levels in international and domestic stock markets, advisors preference is evenly split at 39 per cent. Meanwhile, 22 per cent are equally confident in both markets or undecided. With a shifting domestic and international political landscape, financial advisors are not putting all of their eggs in either basket.
 
Despite political concerns, advisors said that most clients (80 per cent) want to take advantage of the current environment by investing more dollars. However, half of advisors recommend clients maintain risk levels and one-third recommend lowering portfolio risk. Conversely, 17 per cent are advising clients to take on more risk, consistent with 68 per cent of investors who have appetite to invest new dollars at this point in time.
 
The survey of 218 financial advisors was administered in-person in April 2017.
 

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