Mass affluent investors need advice, unlikely to get it

Main Street investors in the U.S. remain pessimistic about their finances five years after the financial crisis, according to the “2013 Mass Affluent Investor,” a new study released this week by Spectrem Group.

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The mass affluent don’t feel wealthy enough to require financial advising services, though they have a net worth of $100,000 up to $1 million (not including primary residence). A significant share feels they haven’t built enough wealth to achieve financial goals like comfortable retirement. At the same time, mass affluents are reluctant investors who report a low tolerance for risk.

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Highlights of the report include:

• Prevailing Pessimism: Less than half indicate their finances are in better shape now compared to a year ago and only 46 percent expect their situation to improve in the coming year.
• Lone Rangers: Roughly one-fourth works regularly with a financial advisor. At the same time, less than one-third wants to be actively involved in the day-to-day management of their finances and a large share say they have little or no investment knowledge.
• Risk Averse: Less than one-third is willing to take significant risk with portion of their investments, and 21% say they regret not investing more conservatively in the years leading up to the financial crisis.
• Retirement: More than 40% are unsure of having sufficient income to live comfortably in retirement, and 40% plan to work past the age of 65. Close to 40% of those younger than 54 say their household is not saving enough.
• Concerns: The mass affluent are primarily worried about maintaining their own financial position, but close to 60% are worried of the financial situation of children and grandchildren, and more than half indicate they are caring for aging parents. The economy, political environment, tax increase, inflation and national debt are also weighing on their confidence.

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Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.