Helping investors achieve financial stability in retirement may be one of the most important things we can do as an industry. According to our latest Global Survey of Individual Investors, 72% of investors worldwide are worried about their retirement readiness. Whether their plan is government-sponsored, employer-matched or personally funded, investors are concerned about their ability to retire comfortably. Although our survey results also indicate a gap between investors’ understanding of risk and the trade-offs between risk and return1, they also suggest that investors want more information and believe that financial professionals can provide it.
Investor expectations may be unrealistic. One example of misperceptions of risk and return uncovered by our research is that investors say they expect to generate returns of at least 9.5% above inflation, which translates into real returns of 12 to 13%. Unfortunately, investors may not be ready to take on the risk associated with pursuing such high levels of return. Moreover, 63% of investors report that they have no financial plan — signaling a clear opportunity for advisors to provide help.
The advised edge
Six in ten investors believe that working with a financial advisor makes them more likely to reach their financial goals. This perception of credibility, coupled with investors’ need for help, provides an opportunity for financial advisors to empower their clients. At Natixis Global Asset Management, we seek to partner with financial advisors to help them meet this opportunity.
A durable approach to retirement
As the responsibility for retirement funding continues to shift from employers and governments to individuals, the most effective financial advisors are likely to be those who can engage collaboratively with their clients to formulate a comprehensive retirement strategy.
Watch John Hailer discuss the results of the 2016 Global Survey of Individual Investors with Natalie Breen of CityWire. A complete survey report is available for download at durableportfolios.com.
1 Respondents to our 2016 Global Survey of Individual Investors say they need returns of 9.5% above inflation, while 79% report that if forced to choose, they would pick safety over performance. Natixis Global Asset Management, Global Survey of Individual Investors conducted by CoreData Research. July 2016.
This material is provided for informational purposes only and should not be construed as investment advice. The views and opinions expressed above may change based on market and other conditions. There can be no assurance that developments will transpire as forecasted.
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