Advisor confidence skyrockets after Trump's election victory

The election is over, and financial advisors are celebrating. 

After months of holding a roughly neutral outlook on the U.S. economy, advisors' confidence rocketed to new heights in December, one month after the votes were counted. 

That's according to the Financial Advisor Confidence Outlook (FACO), Arizent's monthly survey of wealth managers. Every month, FACO asks hundreds of planners about their confidence in the American economy, converting the results into a score between minus-100 to 100.

This month, in the first FACO conducted since Donald Trump won reelection, advisors were jubilant.

"This will be the best economy of our lifetime," one planner told the survey.

FACO's overall confidence score rose by a record-breaking 21 points, from 3 in November to 24 in December — the highest the score has been since FACO began in June 2023.

Other scores reached new heights as well. Client risk tolerance jumped from minus-9 to 19, the highest it's ever been. Practice performance leapt 16 points to a score of 48, and asset allocation soared 20 points to a score of 21 — both new records.

"I can see people feeling optimistic about their money and the economy," one advisor said. "It's a great time to reach out about our services, so we expect to add more clients."

In FACO's surveys, many wealth managers had complained for months that regulation of their business had become too cumbersome, and they hoped for a Republican administration to take power and cut some red tape. 

In November, they got their wish — and not just for the presidency. Starting in 2025, the GOP will control the White House and both houses of Congress. Since Republicans have a reputation for reducing regulations and taxes, many advisors think this will be good for business.

"With a pro-business Congress, we expect a stronger economy and reduced regulation to drive corporate profit and improve performance," one planner said.

This new optimism spread to the national picture as well. Advisors' views of government policy jumped from a score of 14 in November to 41 in December — another new record. And their outlook on the overall economy nearly doubled, from 31 to 60 — by far the highest it's ever been.

Only the score for the global economic system, which normally resides well below zero, remained in negative territory. But it did improve, inching upward from minus-51 last month to minus-44 in December.

In their survey answers, many advisors were not shy about their preferences in the recent election.

"Trump will do wonders for everyone," one planner said. "The standard of living will increase, more people will have more money to invest, and my practice will grow. Thank God Bidenomics is a thing of the past!"

Many other advisors agreed. When asked how they felt economic conditions would change over the next four years, 80% said the overall economy would improve, 75% said the stock market would rise and 65% said the regulatory environment would get better.

Others focused on more specific issues. One wealth manager, for example, celebrated Trump's support for bitcoin and other digital currencies.

"Since the new administration is pro-cryptocurrency, we may consider offering this investment class," the planner said.

But not everyone was equally enthusiastic. Out of the more than 400 advisors Arizent surveyed, a few expressed concern about the incoming administration.

"Some clients are very upset," one advisor said. "Trump is unpredictable."

Another worried about Trump's proposal for new tariffs on foreign goods, which the planner feared would raise inflation, slow the economy and potentially hurt the stock market. Others, while predicting some benefits from the change in leadership, had a generally uneasy feeling.

"It will be easier to run my business with less regulatory enforcement," one planner said, "but I believe in the long run, trouble is coming."