Planner sentiment slips as markets slide

A levelling off in share market returns combined with the Government’s pronouncements on financial planner remuneration appear to have dented confidence in the financial planning industry, according to new research conducted by Wealth Insights.

The research, conducted over the past four weeks, revealed sentiment among advisers had dropped to levels not seen since around September and October last year, when the market recovery was just beginning to gain genuine momentum.

Asked whether, in their role as a financial planner, times were good or bad right now, the Wealth Insights survey revealed a distinct deterioration in confidence between February and May on the part of planners, with more than half taking a negative or marginally negative view.

The research revealed that planners who believed things were good or very good had dropped from 44 per cent of respondents in February to just 35 per cent in May, while those who believed things to be bad or very bad had grown from 6 per cent to 18 per cent over the period.

Those describing things as being ‘average’ declined from 49 per cent in February to 47 per cent in May.

Wealth Insights managing director Vanessa McMahon said she believed the research pointed to increasing levels of uncertainty in the minds of planners.

“The year started on a positive note because they would have been still buoyed by the strength of the recovery which occurred through the back-end of last year, but they are now encountering a lot of uncertainty,” she said.

McMahon said she believed that it was significant that sentiment had appeared to drop with the stock market but that the discussion about planner remuneration and the recent announcement by the Minister for Financial Services, Chris Bowen, were also likely to have been factors.

Despite the tapering off in adviser sentiment between February and March, it remained at much higher levels than February and May last year, when it reached its lowest level on record.

However, the Wealth Insights sentiment index is still sitting well below the peak it reached in February 2008 ahead of the sub-prime crisis, the collapse of Lehman Brothers and the onset of the global financial crisis.