Independent investment advisers see a renewed emphasis on personal financial discipline emerging as the silver lining of the worst stock market downturn since the 1930s, a recent Charles Schwab Corp. survey has found.

Charles Schwab, based in San Francisco, provides custodial, operational, and trading support to about 6,000 independent registered investment advisers, or RIAs, among a range of other services. Its semiannual Independent Advisor Outlook Study measures the views of independent RIAs on a variety of topics. More than 1,100 independent investment advisers with more than $252 billion in total assets under management participated in the latest study, conducted in late January.

Thirty-two percent of advisers who participated in the study cite "frugal spending habits" as the new consumer behavior that will have the greatest staying power, followed by a "focus on saving money," cited by 26 percent of advisers.

Fifty-nine percent of those surveyed said they expect consumer savings to increase during the next six months, and 62 percent said that their own clients have been more focused on paying off debt in the current market environment.

Advisers clearly feel, though, that consumers should do even more. Fifty-five percent of survey respondents recommend that American consumers save at least 9 percent of their personal income, which is well above the current national savings rate of 4.8 percent.

"Advisers tell us that the pain of the last 18 months may have been the catalyst for some positive behavioral changes regarding saving and personal financial responsibility," says Bernie Clark, senior vice president and head of Charles Schwab Advisor Services.

While recognizing that there is still hard work ahead, advisers feel more confident about achieving their clients' investment goals, the study suggests. In the latest data, 57 percent of surveyed advisers said that achieving client goals will be "very or somewhat difficult," compared with 84 percent who felt that way a year ago.

Surveyed investment advisers also believe that their clients need less reassurance now, saying that about one-third of their clients needed reassurance during the last six months, compared with about half in January 2009. Clients still are hungry for more services, though, and are asking for more support on basics such as financial planning (56 percent), tax planning and accounting services (38 percent), and general education on investments and finance (also 38 percent), they said.

"We know from this study that advisers have spent considerable time over the past year communicating with their clients," says Clark. "But while many advisers that we work with say that they are in more of a 'back to business' mode, there is clearly a continuing need for advisers to play a role as educators for their clients."

The study also found that consumers are continuing to turn to RIAs. Ninety-two percent of surveyed advisers report that they won new clients in the last six months and that 46 percent of these new clients previously were served by full-service "wire-house" advisers, referring to those associated with large, multi-office brokerage firms linked by telecommunications networks.

Eighty-six percent of advisers surveyed said they believe that being independent gives them an edge over full-service wire-house advisers, and 83 percent said they believe their role as a fiduciary helps them win new business. Also, 65 percent of advisers said that one of the reasons they believe they won new business was that their clients had lost trust in their previous firm, and almost 60 percent of advisers said that a desire for more personal advice was another reason they won new clients.

Outlook more upbeat

Advisers surveyed had a generally more optimistic view on the stock market and economy than they did last year. Sixty-five percent of them said they believed the S&P 500 Index will rise in the next six months, and far fewer advisers believe that unemployment will continue to increase (40 percent, compared with 81 percent in July 2009).

More advisers—though still a minority at 39 percent—said they believe the Federal Reserve Board will raise interest rates in the next six months, and nearly half of advisers—46 percent—said they believe that the housing market will continue to soften.

Federal Reserve Chairman Ben Bernanke continued to enjoy a high approval ranking among independent advisers, with 73 percent of those surveyed expressing satisfaction with his leadership.

Following a trend first seen in the July 2009 survey, advisers are continuing to gravitate toward large-cap equities—particularly international large-cap—and signaling moves away from fixed income and cash. One-third of those surveyed said they plan to invest more in emerging-market large-cap stocks, while 28 percent said they intend to invest more in large-cap stocks from developed markets. Just over one-quarter of survey respondents said they expect to increase their investments in U.S. large-cap stocks.

Thirty-five percent of those surveyed said they expect to invest less in cash, and only 10 percent plan to invest more, compared with a high of 28 percent in January 2008.

Only 16 percent said they plan to invest more in fixed income, compared with a high of 42 percent in January 2009.

Exchange traded funds, or funds that track an index but can be traded like a stock, remain the preferred investment vehicles for advisers surveyed, with 36 percent planning to invest more in ETFs during the next six months. To achieve additional ETF allocations, advisers say they will pull assets mostly from cash (37 percent) and mutual funds (33 percent). After ETFs, commodities ranked second in popularity (18 percent), followed by mutual funds with hedging strategies (17 percent), precious metals (14 percent), real estate investment trusts (13 percent), real estate (11 percent), and separately managed accounts (11 percent). Internal Schwab data indicate that more than 70 percent of advisers who put assets with Schwab are using ETFs.

As the market continues to rebound, advisers surveyed said they expect information technology (44 percent), health care (42 percent), energy (37 percent), consumer staples (24 percent), and financials (23 percent) to be the top-performing sectors over the next six months.