Reality of downturn hits planners

The realities of the market downturn have begun to impact financial planner sentiment, according to the latest research conducted by Wealth Insights.

The research reveals a remarkable change in sentiment over the closing months of 2008, with planners becoming increasingly pessimistic, to a degree where 43 per cent think times are bad or very bad — up from just 12 per cent in April and 31 per cent in October.

According to the managing director of Wealth Insights, Vanessa McMahon, October represented a turning point for planners — a month during which market conditions were so adverse it generated a significant change in sentiment.

Additionally, McMahon said the impact on planners tended to depend on how they had structured their revenue streams in circumstances where very few were writing new business and where those heavily reliant on trailing commissions were feeling the downturn more than others.

Notwithstanding this negativity, McMahon said many advisers believed the market had possibly reached its bottom and while 28 per cent believed their business would be worse off over the next 12 months, most believed it would either be the same or better off.

She said another remarkable finding of the latest survey was it appeared that the depth of the downturn had actually assisted planners because their clients understood it was a global crisis and it was unlikely they could have avoided being impacted.