Business sentiment from financial planners turned strongly optimistic over the first quarter of 2007, with the Brand Management Adviser Sentiment Index registering a move from 22.9 to 41.6.
The index reading took into account the views of just under 500 advisers and was conducted in February.
The bullish reading is the strongest recorded over the previous 18 months and reflects financial planners’ increasingly optimistic views about the performance of equities markets and their ability to attract new clients.
Financial planners’ reaction towards equities moved upwards from a near neutral reading of 6.1 to 16.3. Advisers and investors expect equities to outperform property over the February quarter with advisers rating and expectation of 3.9 on a 5 point scale.
This has lead to an expectation from financial planners that new clients (Figure 2) and new funds flow would improve in the current quarter.
The connection between Financial Planners expectations of share market performance and optimism about new client and funds flows continues to hold in this survey and after some recent news on global share markets; it looks as if advisers’ expectations for this quarter may be well founded.