Market volatility and the political environment dominated investor discussions with advisers in the first quarter of 2019, according to Eaton Vance’s Spring 2019 Advisor Top-of-Mind Index (ATOMIX) survey.
Ninety-five per cent (95 per cent) of advisors reported interest among their clients in reallocating portfolios to address or capitalise on recent volatility, and nearly nine out of ten (88 per cent) said the current political environment is a key part of client conversations. Moreover, three out of four advisors (75 per cent) said fear is the primary current motivator for their clients, a 74 per cent increase since October 2018.
According to the ATOMIX survey, many advisors maintain a focus on portfolio tax efficiency, employing several tactics to mitigate clients’ tax bite: 37 per cent prefer municipal strategies; 32 per cent opt for tax-managed equity strategies; 25 per cent use tax-loss harvesting; 7 per cent manage high capital gains.
Additionally, 61 per cent of advisors reported that their clients have concentrated stock positions that could trigger capital gains taxes when sold.
“While market volatility and politics can be distractions, leading advisors find time to help clients understand their personal tax situations and implement smart tax-management solutions for their portfolios,” says John Moninger, managing director of sales. “And the very best advisors approach tax management as a twelve-month-a-year proposition, not just an April or December activity.”