A comfortable retirement. The thought is something every working American has probably thought about at one time or another. Well, the Employee Benefit Research Institute believes they may have figured out what makes up a comfortable retirement.
The Spectrem Affluent Household Outlook fell 6.36 points in February to 8.98, a four-month low. Non-Millionaires drove the reversal, indicating significantly less optimism than their Millionaire counterparts in four financial factors that impact their daily lives. The Spectrem Affluent Household Outlook is a monthly measure of Affluent investor confidence
In the years since the economic collapse, Affluent investors have taken a more self-directed role in doing independent financial and investment research, subscribing to additional financial publications and frequenting more financial websites, according to Spectrem Group research.
Investors know that a high risk investment is supposed to provide a high rate of return. But it doesn’t always work out, which is why they are called “high risk investments”. Studies show that less than half of investors are willing to put money into high risk investments. Unregulated products such as hedge funds tend to be high risk, as does others known as alternative investments.
The volatility that has marked the New Year thus far is making Affluent investors wary of the market, Spectrem Group’s monthly investment preferences survey finds. When asked how they intend to invest in the short term, Affluent investors indicated they would hold on the sidelines. Non-Millionaires, especially, said they would hold off on investing in the coming month.
Despite market volatility, Affluent investors began the New Year with an upbeat mindset, but February has seen a confidence course correction, as reflected in a decline in the Spectrem Affluent Investor Confidence Index (SAICI®), which dropped 9 points to -2, a four-month low.
Over 60 percent of working households are currently using a financial advisor to help them in some way with retirement planning, according to Spectrem research.Among retired households, over 70 percent used a financial advisor to plan for retirement, the study reports.
In the study Asset Allocation, Product Ownership and Perception of Providers, young Millionaires indicate far more interest in almost all forms of investments.
Changing the deductions for charitable contribution could take a bite out of what charities are receiving because wealthy Americans do contribute to charity. Ongoing research conducted by Spectrem Group of affluent investors from 2013 shows that 91 percent of Ultra High Net Worth investors with a net worth between $5 million and $25 million made charitable contributions in the 12 months leading up to the study. Among Millionaire investors with a net worth between $1 million and $5 million, 83 percent contributed, and 86 percent of Mass Affluent investors with a net worth between $100,000 and $1 million made contributions to charity as well.
Vacation, home improvements and automobiles are where Ultra High Net Worth investors spent the most money in terms of discretionary spending over the past 12 months. (Ultra High Net Worth investors are those with $5 million to $25 million of net worth not including their primary residence.)
It seems like a contradiction of terms. How can a financial services organization effectively offer personalized service to Mass Affluent investors? Apparently, some organizations are doing a great job of delivering those services. Who are they?
In a 2013 Spectrem research study, investors were asked to select a preferred financial advisor from a group photo of eight people, four men and four women, with obvious differences in ages. The oldest male in the photo was chosen by 35 percent of investors, followed by the next oldest male with 26 percent. Two women in the photo received 12 percent of the vote.