Interest rates that remain near generational lows have increased anxiety levels for income-starved investors, many of whom also continue to fear a spike in market volatility that could negatively impact their investments. Advisors surveyed for Eaton Vance's latest quarterly "Advisor Top-of-Mind Index" indicated that finding reliable income sources is their clients' top financial concern, with protecting wealth from market volatility a close second.  

"Clients, frustrated by the ongoing search for yield, are telling their advisors that having a consistent, reliable stream of income remains a priority, but that they are unsure where to turn," said Bob Cunha, Managing Director, Marketing and Distribution Strategy for Eaton Vance. "This is pushing advisors to look for non-traditional income generators in a market environment that, despite record-low volatility, has advisors and investors alike nervous about the next market downturn."

Kathleen Gaffney, co-director of investment grade fixed income at Eaton Vance, stresses the importance of remaining nimble and opportunistic. "Interest-rate risk has made it difficult to find value in the traditional credit markets. Having the flexibility to invest in a variety of different fixed-income sectors, as well as equities, enables investors to explore the most compelling market opportunities and quickly turn ideas into portfolio positions."

Generating income ranked 105.1 on the Advisor Top-of-Mind Index, followed closely by protecting wealth from market volatility at 102.2. Growing wealth through capital appreciation and reducing taxes ranked considerably lower on the index, at 92.3 and 78.1 respectively, further reinforcing the defensive mindset of investors.

"Clients appear to still be anxious about the markets," said Cunha. "At least for now, they are less focused on growing wealth and less worried about the tax drag on their investments. This represents an opportunity for advisors to deliver solutions to help address clients' biggest concerns right now, while positioning their portfolios for longer-term success by examining tax-efficient vehicles."

Eaton Vance's quarterly Advisor Top-of-Mind Index measures the overall importance of key issues facing financial advisors and their clients, combined with how fast these issues are increasing in importance. It is part of an ongoing study designed to help identify the key investment themes and concerns clients are commonly raising with their advisors.