A quarterly survey by Eaton Vance has highlighted how investors are not the only ones troubled by current market uncertainties.

(An earlier version of this news story has been published on Family Wealth Report, sister news service to this one.)

Managing market volatility is at the top of the list of US financial advisors’ concerns for the fourth consecutive quarter, according to Eaton Vance’s Advisor Top-of-Mind Index.

Volatility scored 129.7 on the index, which is based on a quarterly survey of 1,000 US financial advisors. The survey was conducted from 24 June – the day of the historic Brexit announcement – to 20 July, 2016.

Further showing nervousness about the macroeconomic environment, a record 82 per cent of advisors said their clients are motivated by fear when making investment decisions.

“The surprise Brexit outcome, ongoing political uncertainty, the possibility of more rate hikes and a sluggish US economy has thrown many advisors and their clients into a state of heightened anxiety,” said John Moninger, managing director of retail sales at Eaton Vance. 

“While unsettling, this environment creates an opportunity for advisors to calm investors’ fears, discuss the opportunities that emerge from market volatility and reaffirm long-term investment plans.”

While two-thirds of respondents proactively contacted clients in the wake of the UK’s decision to leave the European Union to discuss long-term strategies and potential opportunities, advisors’ outlook for the rest of 2016 remains hazy. The survey showed little consensus – almost half of advisors (45 per cent) are bullish on US equities over the next quarter, with 17 per cent reporting a bearish attitude and 38 per cent currently undecided. When asked about a recession, 54 per cent believe there is a low chance, 38 per cent report a moderate chance and eight per cent say there is a high likelihood of a late 2016 recession.

Meanwhile, attitudes towards the upcoming US presidential election are mixed.  While 90 per cent of advisors agree the election will affect markets, 45 per cent believe the impact will be positive and 55 per cent believe it will be negative.

Advisor concerns about generating income for clients ranked second overall at 122.8, compared to 108.1 in the second quarter. Moninger noted that many are employing a variety of fixed income strategies to meet their clients’ needs in the continued low-return environment.

“At the same time, many are watching the Fed for a possible rate hike, which would impact bond prices and serve as a catalyst for advisors to adjust portfolio allocations,” he said.

Opinions about the timing of a potential rate hike from the Federal Reserve are also split, with 46 per cent predicting one rate rise before the end of the year and 42 per cent believing there will be no rise until 2017. In the event of a hike, advisors identified floating-rate loan funds as their most-preferred strategy for generating income for clients, followed by high-yield bond funds and multi-sector bond funds.

As for whether the Federal Reserve will explore negative interest rates, a 62 per cent of advisors do not expect it to entertain the idea in 2016 and 22 per cent say it will never do so.

The survey also highlighted socially responsible investing as an area of importance, especially for millenial advisors, of which 26 per cent use socially responsible investments whenever possible, compared with 13 per cent of advisors of all other generations. Indeed, 88 per cent of millennial advisors say socially responsible investing is rising in interest or a “hot topic” right now, compared with 57 per cent of advisors of all other generations.

Just under a quarter of advisors said they proactively engage their clients in discussions about socially responsible investing, while 45 per cent said their clients are the ones that initiate these conversations.