A recent survey of economic planners revealed which assets they recommend most to their clients — and the way those recommendations have shifted over time.
The 2024 Trends in Investing Survey conducted by the Journal of Financial Planning and the Financial Planning Association (FPA) showed that exchange-traded funds (ETFs) proceed to be the investment vehicle that’s most really helpful and utilized by clients.
The survey found that 88.4% of planners recommend ETFs, although that’s down barely from in 2023, when 90.1% of economic planners preferred the asset class.
Meanwhile, 60.1% of economic planners said they expect ETF usage to extend in the subsequent 12 months — in comparison with the 49.7% of them who said that in 2023. However, only one.9% expect to see a decrease in ETF usage in the subsequent 12 months.
Money isn’t king, but it surely is popular
Money and money equivalents like money market funds are second on the list of preferred investments. The share of planners who say their clients hold money is 81.3%, up from 76.4% in 2023.
In fact, that’s not surprising as more investors have sought the security of money in a high-interest-rate environment and what was expected to be a sluggish market after last yr’s huge bull-market rally.
Nonetheless, the stock market has actually been stronger than expected, and which may be why fewer planners are recommending money this yr. Just 19.2% said they’re recommending that their clients hold extra cash, in comparison with 24.1% in 2023.
However, 29.3% of economic planners are telling clients to cut back their money positions, in comparison with just 13.6% a yr ago.
Stocks, bonds and mutual funds
The survey also found that the odds of planners recommending mutual funds, individual stocks and individual bonds all went up in 2024.
Specifically, 68.3% really helpful mutual funds, up from 63.9% last yr. Meanwhile, 53.4% of planners really helpful stocks, up from 50.8%, and 50% suggested investing in bonds, up barely from 47.1% a yr ago.
As well as, 26.9% of planners suggested increasing usage of bonds over the subsequent 12 months, in comparison with 23.6% in 2023. Further, 26.4% really helpful increasing stock holdings this yr, up from 18.3% a yr ago. Finally, 16.4% suggested increasing investments in mutual funds over the subsequent 12 months, up from 14.1% a yr ago.
Of the three asset classes, mutual funds had the very best percentage of economic planners recommending a decrease in those investments, at 30.3%. Nonetheless, that was up from 25.7% in 2023.
This shows that mutual funds proceed to fall out of favor in comparison with ETFs. Further, 20.2% of economic planners really helpful reducing stock holdings in 2024, in comparison with 15.2% a yr ago, while 13.5% suggested reducing bonds, up from 10% in 2023.
Crypto and the economy
The evaluation also revealed barely more interest amongst financial planners in recommending cryptocurrency to clients, although the numbers remain low. Specifically, 4.8% of them really helpful cryptocurrency, up from 2.6% in 2023.
Nonetheless, while 4.8% of planners suggested increasing crypto allocations (up from 3.1%), 7.2% really helpful decreasing crypto investments, in comparison with 4.7% a yr ago.
Finally, financial planners are more bullish on the economy this yr in comparison with last. On a scale of 1 being bullish and five being bearish, the median outlook for planners over the subsequent six months was 2.5, in comparison with 3.3 in 2023.
For the subsequent 12 months, the outlook stands at 2.6 versus 2.9 a yr ago. Meanwhile, for the subsequent five years, the rating is again right in the center at 2.5.
The 2024 Trends in Investing Survey was conducted from March 4 to April 3 and polled 208 financial planners.