Six in Ten Investors Age 55+ Have Yet to Plan or Will Not Adjust Their Investment Approach
NEW YORK, June 19, 2017 /PRNewswire/ — According to new research released today by Dreyfus, a pioneer in U.S. investing, half of individual investors (49%) have indicated they have yet to take any action to reevaluate their investment approach in light of the possibility of a shifting investment landscape, as we head into the eighth year of the economic recovery.
“As long-term risk/return expectations have shifted with an increase in inflation, the rise of U.S. nationalism and record-low volatility, investors would be well-served to reevaluate their portfolios in light of changed circumstances to determine if they will continue to meet their investment objectives,” said Mark Santero, Chief Executive Officer, The Dreyfus Corporation, a BNY Mellon company.
The “Helping Meet Investor Challenges Study” surveyed 1,250 investors with $50,000 or more in investable assets on their approach to investing. This is the first release of survey data that explores all elements of the group’s investing lives, including engagement with investment professionals, portfolio allocations and appetite for risk. The study also surveyed 200 independent and institutionally-based advisors regarding the investing relationship between advisors and clients.
You can view the survey results, fact sheet and infographic here:
Older Investors Ignoring Past Market Precedents in Adjusting Portfolios
Older investors have had an opportunity to weather a variety of stock market highs, such as the bull markets from 1987-2000 and 2009 to the present, and lows, such as the savings and loan crisis in the 1980s, the stock market crash in 1987 and most recently the financial crisis of 2008. Yet, even with this past knowledge in the rearview mirror, the survey reveals:
- Sixty-one percent of investors aged 55+ indicated they have not or will not reevaluate their investment approach in today’s existing investing environment.
In comparison, younger investors who experienced the 2008 market meltdown and who began their savings efforts in the earlier part of their careers demonstrated a forward-thinking approach to reevaluating their portfolios. This generation of investors between the ages of 21 and 34 indicated the following:
- Sixty-five percent had already evaluated their investment approach, compared to just 51% of those aged 35-54 and 39% of those aged 55+.
- A greater percentage of younger investors between 21-34 (63%) also indicated they had worked with an advisor in reevaluating their investments, while only a third (38%) of those 55+ had evaluated their investments with an advisor.
“Our survey revealed that younger investors have demonstrated in greater numbers a more proactive approach to reassessing their portfolios and seeking out their advisors for counsel, some of whom might lack the historical market experience and accumulated wealth of older investors,” said Mark Santero.
Mass Affluent Investors Slow to Take Action on Their Portfolios
The survey also looked at the investment actions taken by mass affluent investors, those who had investable income between $250k and $2.5 million. The survey found nearly half of this audience had work to do in reviewing their portfolios and how more than a third had decided to do nothing with their portfolios:
- Forty-three percent of the total mass affluent investor audience had not reevaluated their investment approach in this new investment environment.
- Thirty-nine percent of mass affluent investors working with an advisor had not reevaluated their investment approach.Despite the last eight years of a U.S. bull market, uncertainty is very much a reality in U.S. and global markets.
Investors Look to Advisors in Navigating the Way
Despite the last eight years of a U.S. bull market, uncertainty is very much a reality in U.S. and global markets. Yet a majority of investors remained on the sidelines, the survey found:
- Six in ten investors (60%) without a financial advisor are most likely to put off their plans to address today’s market challenges, with only one-quarter (24%) saying that they plan to address challenges they face at some point in 2017.
- Seventeen percent said they don’t have any plans to reevaluate their investment approach.
Santero added, “We believe investors who don’t work with a professional advisor could greatly benefit from the insights an advisor can provide in tailoring a goals-based approach for their individual circumstances against today’s investing environment of uneven economic growth. Options might include diversifying their U.S. exposure with global fixed income and equities or considering dividend or alternative investing strategies.”
Those individual investors who worked with an advisor had a greater likelihood of adjusting their portfolios. The findings revealed that:
- Almost three-quarters (65%) indicated they had reevaluated their investment approach, compared to two in five (40%) who had not worked with an advisor.
- Nearly three-quarters (73%) of advisors’ clients changed their approach as a result of advice.
Equities are subject to market, market sector, market liquidity, issuer, and investment style risks, to varying degrees. There is no guarantee that dividend-paying companies will continue to pay, or increase, their dividend. Bonds are subject to interest-rate, credit, liquidity, call and market risks, to varying degrees.
Generally, all other factors being equal, bond prices are inversely related to interest-rate changes and rate increases can cause price declines. Investing in foreign denominated and/or domiciled securities involves special risks, including changes in currency exchange rates, political, economic, and social instability, limited company information, differing auditing and legal standards, and less market liquidity. These risks generally are greater with emerging market countries.
Helping Meet Investor Challenges Study Methodology
Toluna International, on behalf of BNY Mellon Investment Management, fielded the “Helping Meet Investor Challenges” research. Toluna conducted the study online with 1,250 individual investors age 21 or older with at least $50,000 in investable assets, along with 200 independent and institutionally-based financial advisors. It had a ±2.5% to 3.0% Margin of Error (MoE) at 95% confidence at the “All Respondent” level and ±3.25% to 3.75% MoE at 95% confidence for demographic, behavioral, attitudinal and other subgroups. No data was requested or collected concerning specific investment, banking, advisory or similar financial relationships with Bank of New York Mellon or any other institution, organization, agency or firm. All information was self-reported by study participants.
Established in 1951, Dreyfus is among the pioneers of U.S. mutual fund investing with $300 billion in assets under management (as of March 31, 2017). As part of BNY Mellon Investment Management, Dreyfus enables U.S. retail investors to access mutual funds through BNY Mellon’s globally diversified investment boutiques, with investment solutions spanning global, international and domestic equity, fixed income, alternatives, retirement and cash investment strategies.
Dreyfus has four principal businesses, each providing a unique set of products and services to a diverse range of customer segments. These businesses are:
the Intermediary business, which distributes Dreyfus’ funds through broker-dealers;
the Institutional Investor business, which distributes investment solutions from select BNY Mellon investment boutiques to institutional investors;
the Cash Investment Strategies division, one of the industry’s leading institutional managers of money market strategies;
and Dreyfus Direct, a direct-to-consumer business which enables clients to enjoy the convenience, safety, and financial benefits of having their pay, Social Security, pension check or tax refund directly deposited into their BNY Mellon/Dreyfus mutual fund account.
About BNY Mellon
BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 35 countries and more than 100 markets. As of March 31, 2017, BNY Mellon had $30.6 trillion in assets under custody and/or administration, and $1.7 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on www.bnymellon.com. Follow us on Twitter @BNYMellon or visit our newsroom at www.bnymellon.com/newsroom for the latest company news.
This press release is qualified for issuance in the U.S. only and is for informational purposes only. It does not constitute an offer or solicitation of securities or investment services or an endorsement thereof in any jurisdiction or in any circumstance in which such offer or solicitation is unlawful or not authorized. This press release is issued by Dreyfus to members of the financial press and media and the information contained herein should not be construed as investment advice. A BNY Mellon Company.