Financial behaviors PDF
Preview Financial behaviors
Financial behaviors and the investor’s mindset Five key findings and action steps for advisors We partnered with Spectrem Group, an industry leader in primary investor research, to bring you the latest trends in the outlook and behavior of more than 10,000 mass affluent, millionaire, and ultra-high-net-worth investors. This report draws on investor insights gathered through the last quarter of 2016. We distilled these findings into key insights and tips for advisors Affluent populations in the United States Million households 30.5 Mass affluent: $100,000 to $1 million in net worth 9.4 Millionaire: $1 million to $5 million in net worth 1.3 Ultra-high-net-worth (UHNW): $5 million to $25 million in net worth NNoottee:: NNeett wwoorrtthh ddooeess nnoott iinncclluuddee pprriimmaarryy rreessiiddeennccee.. 12 Headlines shape investors’ financial concerns These are the topics that weighed most on investors’ minds. 74% Government 72% gridlock 72% 72% National 73% debt 74% 72% Political 71% environment 73% Mass affluent Millionaire UHNW ACTION STEPS Resources to learn clients’ complete • In communications with clients, explain how current events may or may not affect financial picture their portfolios. • Emphasize how broadly diversified, Behavioral BVEHaAVIOnRAgL COuACaHINrGd coaching kit Advisor’s well-balanced portfolios can help insulate Alpha® clients against market forces such as those Materials for you and your clients associated with government-related concerns. Vanguard G lobal Macro Matters Timely insights on the markets and global economy 22 Rising health care costs top investors’ concerns This topic provides an opportunity for advisors to showcase their value. 74% Cost of 75% health care 56% 59% The health of 59% my spouse 53% 53% My own 53% health 46% Mass affluent Millionaire UHNW ACTION STEPS Resources to • Health care and its associated costs are a educate clients primary concern for many investors. This topic offers an opportunity for advisors to Family showcase their value in a way that doesn’t meetings involve trying to sell products. Facilitator guide • Presenting clients with options for how to pay for their health care needs in retirement is a way to gain their trust. Client Learn about Education caring for an Guides elderly parent 32 “Socially responsible” investments are important for some segments. Younger investors showed greater interest in picking socially responsible investments. 29% 52% 38% 29% 25% Total Millennials Gen X Baby boomers Silent Generation Action steps Resources to • The growing trend among younger investors to educate clients invest in socially responsible companies cannot Vanguard’s be ignored. Take time to understand what social Portfolio responsibility means to clients who express an Analytics interest in this area. tool • Explain how choosing investments based on social responsibility can be a slippery slope. Vanguard Global Macro Matters Present clients with options for both socially Timely insights on the markets and global economy responsible investments and broadly diversified investments and suggest they contribute a portion of their returns to charities of their choosing. 42 Investors focus on risk, diversity when selecting investments Advisors can show their value by addressing these concerns during portfolio construction. % % 73% 70% 69% 86% 87% 90 82% 85% 90 76% 75% 75% 79% 78% 82% % 0 % 4 1 % 3 3 2 Tax implications Level of risk Diversity of Socially Past track Reputation of of investments associated with investments responsibility record of companies where investments of investments investments investments are made Mass affluent Millionaire UHNW
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