Investment advisors are less bullish on the economy than they were a year ago, according to a new survey, but their outlook on U.S. financial markets remains largely positive.
The latest TD Ameritrade Institutional RIA Sentiment Survey, released Thursday, found 2014 was a strong year for registered investment advisors who saw double-digit growth in clients, revenue and assets. Sixty-three percent said they added clients over the previous six months, at an average growth rate of 14 percent. About two-thirds of RIAs saw an increase in revenue, while assets under management increased by 17 percent on average.
But recent volatility in the markets and a series of unsettling geopolitical events in Russia, the Middle East and elsewhere have tempered their outlook for the year. Only half feel upbeat about the U.S. economy, and 17 percent are somewhat or very pessimistic—three times as many as a year ago. Nearly two-thirds of advisors surveyed said geopolitical tensions have also negatively affected clients' market views.
Fred Tomczyk, chief executive of TD Ameritrade, Inc., told CNBC he's not surprised by the concerns expressed by advisors and their clients. "These are times that test whether you've got that risk appetite," he said, but added, "when you look around the world, the U.S. is still probably the best place to be."
Indeed, investment advisors remain upbeat about the U.S. market, despite recent volatility and the possibility that continued appreciation of the U.S. dollar could weigh on corporate earnings (and, by extension, equities). According to those surveyed, U.S. equities represent 53 percent of their clients' assets, a 23 percent increase from 2010, while international holdings have dropped by two-thirds to 9 percent of client assets today.