Insights from Financial Advisors: Election Predictions and Market Trends

With recession worries, global conflicts, regulatory hurdles and a tight race for the White House hovering over the markets, 2024 has been another turbulent year for financial advisors and their clients.

Against this backdrop, we surveyed over 600 of our financial advisor members between August 19-30 to assess their outlook on these and other issues. The responses suggest the industry is unsure about the likelihood of a recession, feels challenged by regulatory threats and expects Donald Trump to return to the Oval Office. Here’s a closer look.

Donald Expected to Trump Kamala

Despite polls showing a tight race between Vice President Kamala Harris and former President Trump, a majority of survey respondents believe Trump will emerge victorious, with nearly 65% predicting he’ll be elected in November.

Whatever happens then, myriad complex factors will impact business, capital markets and the overall economy over the next four years. Still, advisors can expect their clients to wonder what the election outcome could mean for their wealth.

Is a Recession Coming?

While 19% of respondents are unsure whether we’ll see a recession in the next year, most of the rest believe one is coming. In fact, 44% of those who answered the survey predict at least some likelihood of a recession. Conversely, nearly 37% don’t think it’s likely to happen.

Where are Markets Headed?

According to most survey respondents, markets will be up a year from now. Over 60% believe markets will rise “slightly.” Almost 13% are even more optimistic, predicting stock valuations will climb “significantly.”

More than 12% argue equities will flatline over the next year. Nearly 13% are expecting a negative turn.

Advisors’ Biggest Challenges

When asked about the biggest challenge their businesses face today, 60% of respondents selected regulatory and compliance pressures. Client acquisition and retention was at the top of the list for more than 13%, and about 8% said they struggle most with managing technology leads. Succession planning and meeting client expectations rounded out the list, with each being cited by about 7% of respondents.

Legislative and Regulatory Threats

As our industry contends with several legislative and regulatory challenges, the greatest threat, according to 60% of survey respondents, is changes to their independent contractor status. New fiduciary rules took second place with 29%. Almost 5% listed business taxes as the most pressing. Approximately 6% said something else was at the top of their list.

Do You Have a Succession Plan?

Though advisors are increasingly creating succession plans to prepare themselves and their clients for the unforeseen or the inevitable, a significant number are still behind. More than 15% of survey respondents said they do not have a succession plan. The upside is that nearly 58% reported having a plan in place, and another 27% said they are working to establish one. 

Client Worries

What are clients most worried about? Our financial advisors reported political uncertainty and global conflicts were at the top of their list. With wars in Ukraine and Gaza and a whirlwind election season stateside, it’s no wonder that nearly one in three respondents chose this. Market volatility and inflation were also top client concerns, both at a little over 20%. 

Is Bitcoin the Right Investment?

Even though Bitcoin and other cryptocurrencies reached all-time highs earlier this year, more than half of respondents (51%) believe such investments are too speculative and don’t have a place in their clients’ portfolios. That said, 43% said they would consider it depending on the client.