Headlines you need to know this week

May 27, 2020

Investors react to volatility

How investors react to volatility varies with age. A recent survey found two thirds of investors have changed their investment allocations based on recent market swings. Among respondents, Millennials tended to invest in equities, seeking value in less expensive beaten down stocks. Investors in the Gen X and Baby Boomer segments sought perceived safer investments such as money market funds or high-yield savings accounts.

Some report declining retirement confidence

Nearly one quarter of adults in a recent survey reported that they are less confident about their ability to retire comfortably due to the pandemic. The survey included those currently working as well as recently unemployed. The economic shutdown affected the jobs of 58% of workers in a range of ways including reduced hours or pay, layoffs or furloughs. Among Millennial respondents, 33% said they plan to take, or have already taken, an early withdrawal or loan from their retirement accounts.

Advisors expand communications during the pandemic

With businesses and investors on lockdown for weeks and increased market volatility, financial advisors have faced many challenges. Increased uncertainty has meant more client calls and higher workloads. Many advisors report meeting these challenges with more communications. Advisors note an increased use of online communications and video for conferences.
May 19, 2020

Investors seek sustainable investments

Investors continued to pour money into sustainable investments as the pandemic expanded in the first quarter. According to Morningstar, inflows to global sustainable funds were $45.6 billion, compared with $384.7 billion in outflows across all funds, the report stated. In the United States, inflows totaled $10.5 billion, surpassing the previous quarterly record in the fourth quarter of 2019.

More advisors turn to social media to prospect

Social media became a more important marketing tool as the country went into lockdown due to the pandemic. A recent article offers an overview for advisors using social media to reach out to different generations. According to the report, 90.4% of Millennials use social media, representing the highest usage of any other generation. Advisors may also consider using video, as 75% of Millennials watch video content every day.

Advisors’ capacity to listen inspires trust

Investors are looking for advisors who are more than financially literate. According to a recent poll, 85% of adults said that in order to earn their trust, advisors must demonstrate “emotional intelligence.” Respondents cited several characteristics of emotional intelligence including listening and acknowledging their needs, communicating clearly, following up, and showing concern about their clients.
May 12, 2020

New research reveals women’s retirement income struggle

The retirement income gap experienced by women has been well-documented. But new research shows how significant that gap has become. According to the National Institute on Retirement Security, women generate only 83% of the retirement income of men. The study found that women age 65 and older have an average household retirement income of $47,244, which is 17% less than the $57,144 in income for men. Researchers cited caregiving, gender pay inequality, and divorce as reasons for the gap.

Household debt may climb due to pandemic

Households may need guidance managing debt as pandemic-driven use of credit shows an upward trend. In a February poll, nearly 74% of adults reported that they had debt and 33% said they devoted one-third of monthly income to paying off debt. Among respondents, 42% said they had credit card debt and that 54% of that debt was used to pay for necessities such as rent, utilities, and groceries. Before the pandemic, average household debt had been on the decline.

Millennials seek to save more

Millennials are delaying buying a home or starting a family to save more due to the COVID-19 crisis, according to a recent survey. Among respondents, 62% said their finances were negatively impacted by the pandemic. In a separate study, Ellie Mae reported that Millennial homeowners represented 38% of refinancing activity in March.
May 5, 2020

Many advisors adopt holistic approach

More than half of advisors surveyed indicated they are adopting a holistic planning model to include financial wellness programs. Most surveyed (71%) said they also plan to expand their business to include more Millennial clients. Nearly 80% of respondents are looking to asset managers to help them optimize their businesses.

Advisors are trusted sources

Concerned about the impact of the pandemic, many investors are seeking help from a financial advisor for the first time, according to a recent survey. Nearly one-quarter of respondents (24%), and a subset of investors (26%) with $100,000 or more in investible assets, are asking a professional advisor to help manage their finances and investments.

Emotional support may be part of the job

About one-quarter of financial advisors surveyed recently reported that clients are reaching out to them for emotional support and confidence as well as financial advice. As investors weigh the impact of the pandemic on their finances, discussions with advisors also include retirement planning, family issues, housing affordability, and other challenges.
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