There have been reports of a surge in call volumes in the wake of Brexit – and robo-advisor Betterment went so far as to suspend trading. What have NAPA Net readers experienced?
Well, in the days immediately following the announcement, not much. No respondents said they had heard from lots, or even “several” plan sponsor clients on the issue. About one in eight indicated they had heard from “a few,” but the remaining were split between “not yet” (52%) and “no” (38%).
The response was pretty much the same when it came to participant inquiries. Granted, many of those might have been fielded by recordkeepers, but “a few” was the only positive response (17%), while once again “no” (34%) and “not yet” (49%) were the dominant responses.
As for the response(s) to these calls/emails, “wait and see” was the predominant response.
Only about a quarter of this week’s respondents had made preparations for an increase in call volumes, with the rest split between no preparations, and a decision to wait until there were signs of an increase in volume to justify it.
Betterment ‘Break’?
We also asked NAPA Net readers what they thought of Betterment’s decision to suspended trading Friday morning – reportedly having taken the step to protect investors from paying the higher transaction costs associated with buying and selling securities during times of extreme market volatility. Investors reportedly weren’t told about the decision ahead of time. (Betterment says it does this kind of thing routinely during high market volatility.) Among this week’s respondents, 12% thought it was a good thing, but half said it was a bad thing, and another quarter thought it was a very bad thing. The rest? Just thought it was a “thing,” neither good nor bad.
While nearly two-thirds (62.5%) saw the Brexit as having a “noticeable negative impact” over the next six months, the rest of this week’s respondents saw no real impact in that timeframe. Take it out to 12-18 months, and the “no real impact” rose to 76%, with the rest still seeing a noticeable negative impact. As one reader noted, “Think in about a year to a year and a half, the ‘new world order’ will be sorted out and things will go back to ‘normal.’”
Election Junction?
And while much has been made of the possibility that the sentiments that culminated in the Brexit have some parallels in the rhetoric of this election cycle here, half of this week’s respondents saw “not much” impact come November, 37.5% said “not really,” and just one in eight said “definitely.”
Comments were sparse this week, but one reader opined that, “There will be the usual media overload, but if you have a broadly diversified portfolio, and don’t panic over short term volatility, everything will balance out over the long run.”
Another said, “I was waiting for an opportune time to convert the rest of my pre-tax IRA to Roth, and I think that time has arrived!”
But my favorite reader comment this week was “…as they say in the UK... keep calm and carry on...”
Indeed.
Thanks to all who participate in our weekly reader poll!
Got a question you’d like to run by your fellow readers? Want to get a real-world perspective on an issue? Feel free to post it in the comments section below, or email me directly (and anonymously) at [email protected].
