During the period from October 22 to October 31, Wealth Manager polled the 2008 Top Dogs firms for their views on a broad range of issues. Here is what they told us: Asked to rank current issues of concern--including the credit freeze, market volatility, the election, lack of an asset class that's performing well, and the new regulation that will result from the current crisis, the Top Dogs responded that in the short term (the next few months to a year), the biggest issue for wealth managers is market volatility (42%), followed by the credit freeze (30% and lack of an asset class that is performing well (10%). The election and new regulation tied at 8% apiece.
Beyond one year, market volatility remains the top concern of 34% of the respondents, but new regulation resulting from the crisis becomes the next big concern (26%), followed by lack of an asset class that's performing well (14%), politics (11%) and the credit freeze (8%).
Participating wealth managers said they had not generally allocated more to cash (52%) in the year prior to August 30, 2008, and 62% say their allocation to cash stood between 1% and 15%. Another 28% of participants allocated between 16% and 30% to cash as of Sept. 1. Most participants (46%) say their allocation to cash was the same at the time of the poll as it was on Sept 1, 2007, but 44% say the cash allocation was higher at the time of this poll.
On the subject of income taxes, 85% of the wealth managers who participated expect to see higher income taxes in 2009 and beyond. We did not ask whether this was expected because of the enormous deficit and added spending on the TARP program and other extreme measures, or for political reasons. Nearly the same number--82%--expect the cap gains tax rate to increase in 2009 and beyond. --Kathleen M. McBride
