IMCA Members Weigh in on Timing, Impact of Rising Interest Rates

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More than half of IMCA members responding to a June 2015 survey say now is the right time to raise rates

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Six years into expansion, the Fed needs to move rates off the zero bound to begin to create some dry powder for the next downturn.

With the Fed on track to raise interest rates in the foreseeable future, advisors and investors are strategizing about how to retool portfolios to minimize the impact. IMCA members offered their views about the timing and amount of a rate hike along with possible portfolio protection strategies in a June 2015 survey. Views include:

The right time? More than half (55 percent) of IMCA members think now is the right time to move forward with a rate hike while 28 percent disagree, saying the economy is still too fragile after a weak first quarter.

If not now, when? 63 percent think the Fed will raise rates by fall 2015 while 31 percent say rates won’t rise until 2016.

Portfolio insulation. Approximately one-third of IMCA members are allocating more to equities, 30 percent are shifting portfolios toward alternatives and 11 percent plan to buy more bonds if prices decline.

How much? 82 percent of IMCA members think rates will increase by 25 basis points while only 6 percent of IMCA members surveyed anticipate a 50-basis-point increase. Several respondents agree with Federal Reserve Governor Jerome Powell’s assessment that a dual rate increase may be necessary.

“Six years into expansion, the Fed needs to move rates off the zero bound to begin to create some dry powder for the next downturn,” one IMCA member wrote in response to a question about whether now is the right time to raise rates. “Moderately higher rates phased in raised at a measured pace shouldn't derail the expansion,”

Click here for more information. Survey findings are based on 236 responses from IMCA members.

Contact: Ryan Hoffman, Communications Director. P: 303.850.3079 Email: rhoffman(at)imca.org. Twitter: @IMCA.

About IMCA

Established in 1985, Investment Management Consultants Association® (IMCA®) is a nonprofit professional association and credentialing organization with more than 10,000 individual members and certificants worldwide. IMCA members collectively manage more than $2.477 trillion, providing investment consulting and wealth management services to individual and institutional clients. Since 1988, IMCA has offered the Certified Investment Management Analyst® (CIMA®) certification, which earned accreditation by the American National Standards Institute (ANSI) in April 2011, making it the first financial services credential in the United States to meet international standards (ISO 17024) for personnel certification. IMCA’s Certified Private Wealth Advisor® (CPWA®) certification is suited for wealth management professionals working with high-net-worth clients. In 2014, IMCA conferences and workshops hosted nearly 4,000 attendees.

IMCA® and Investment Management Consultants Association® are registered trademarks of Investment Management Consultants Association Inc. CIMA®, Certified Investment Management Analyst®, CIMC®, CPWA®, and Certified Private Wealth Advisor® are registered certification marks of Investment Management Consultants Association Inc. Investment Management Consultants Association Inc. does not discriminate in educational opportunities or practices on the basis of race, color, religion, gender, national origin, age, disability, or any other characteristic protected by law.

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Ryan Hoffman
Investment Management Consultants Association
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