Financial Planners & Investment Advisors NAICS 523940

May 16, 2025 - Investors More Bearish on Stock Market

• Most American investors have a gloomy outlook on the US stock market, with low expectations for the next three months, according to a survey by Charles Schwab. The investment bank’s quarterly report on trader/client sentiment shows 57% have a bearish outlook in Q2, up from 32% in Q1, due to market volatility and a rocky political environment. Investors won’t remain idle, though, and plan to navigate an up and down market. About 61% of investors plan to buy stocks when things dip and almost half of respondents are adding money to their portfolios and plan to invest in individual stocks. The risk of a recession jumped 30 points to 63% and investors expect high inflation throughout the year. Investors feel most bullish about the energy and utilities industries (cited by about half of those surveyed) and are more bearish on real estate holdings and discretionary consumer spending.
• Portfolio management and investment advisor wages for nonsupervisory employees increased 3.4% year over year in January 2025 (per the US Bureau of Labor Statistics) as bonus packages became more generous than they were in 2022-23. Bonus pools are critical compensation elements to investment bankers and account for a significant portion of total compensation. The overall bonus pool spiked to $42.7 billion in 2021 (per the New York State Comptroller) before it course-corrected to more standard levels. The bonus pool was estimated to grow 7% in 2024 to around $36.1 billion. A recent survey of investment banker pay by recruiter Prospect Park Partners found junior associates with a starting salary of $110K can earn up to 50% of base salary in bonuses. At the VP and up level, bankers can earn bonuses equal to or higher than their base salary, with the average bonus being $1.7 million.

• About 96% of investment advisors’ clients asked questions about cryptocurrency in 2024, up from 88% the prior year, according to Investopedia. Increasing bitcoin prices driven by demand for spot bitcoin ETFs in the early part of the year and the outcome of the US presidential election may have boosted interest in cryptocurrency. About 14% of financial planners are suggesting crypto investments to their clients. Many experts advise clients against investing in cryptocurrency due to its high volatility.
• A significant portion of advisors who responded to a recent J.D. Power survey said that they might leave their firm in the near future. Among advisors who are more than two years away from retirement, 34% who work in an employee channel and 41% of those who are independent said that they might jump to another firm in the next year or two. Investment advisory firms will have to work harder to retain top talent, according to J.D. Power.