Headlines you need to know this week

February 18, 2020

Communication is vital to legacy planning

When wealth is transferred to the next generation it may not last long. A recent report noted that lack of communication is the leading cause. A separate study found that 70% of a wealthy family’s assets are gone once they are transferred to the second generation. By the third generation, 90% of families will have lost the savings. In legacy planning, families need to start early and communicate their values to their children, the author noted.

Investors concerned about market volatility

Market volatility will remain a top concern for many investors in 2020, according to a recent study. In the study, investors pointed to asset protection as a key strategy in their portfolios. Having sufficient retirement income was another priority. A full 70% had a strategy in place to manage longevity risk. However, investors are concerned about the solvency of Social Security.

Married women may fall short in retirement savings

Women may fall short of retirement savings due to lack of sufficient planning early in life, a study found. Married women in particular are at a higher risk. The study found that 46% of women in households with two incomes are at risk of not having enough money in retirement, compared with 39% of single women.
February 11, 2020

Millennials are saving more

Millennials are saving more, according to a new study. The average Millennial (defined as adults between the ages of 24 and 41) started saving at age 24, which is earlier than previous generations. Millennials are focused on goals with 75% citing retirement, 51% growing an emergency fund, and 42% saving for travel. Nearly one-quarter of respondents (24%) had saved more than $100,000.

Robo advice industry projected to grow

The robo advice industry is projected to grow to $1.4 trillion worldwide this year, according to a recent report. Assets are expected to reach $2.5 trillion by 2023. The United States has the largest market share (75%) and assets are expected to reach $1 trillion this year.

Investors optimistic about financial future

Many investors are optimistic about their financial future despite having debt, according to a recent survey. More than half (53%) of respondents expect to improve their financial situation over the next 10 years. The majority (64%) polled believe they will be free of debt by 2030.
February 4, 2020

Investor optimism rises

Investor optimism that the price of stocks will rise in the next six months reached a 15-month high in the recent AAII Investor Sentiment Survey. The bearish view — that stock prices will fall in the near-term — dropped 2.7 percentage points. The neutral response was unchanged.

Women represent a growth opportunity for advisors

By not meeting the expectations of women investors, wealth managers may lose up to $700 billion in revenue each year, according to a new report. Women around the world control 40% of wealth. They are also responsible for two thirds of household spending, the report found.

Small-business owners concerned about economy

Small-business owners cited uncertainty about the future of the economy as a top concern in a recent survey. About 25% of those surveyed estimate that they will be unable to make payroll at least once in the coming year. More than 35% said they worried about economic policy, such as tariffs, and the impact on their businesses.
January 28, 2020

Advisors use behavioral finance to help clients

Some advisors use behavioral finance research to help clients avoid financial mistakes. In a recent poll, 71% of advisors said they use these ideas when communicating with clients. The survey described leading biases held by investors. Some investors use recent headlines to guide their decisions or choose data that validates what they already believe. Fear of losing money can also influence decision-making.

Succession planning remains a struggle

About 60% of advisors over the age of 40 plan to sell their business in the next decade, but only 30% have a succession plan, a new report found. Assessing the value of the business can be challenging, the report noted.

Most investors uncertain about retirement savings

Most savers over the age of 40 (60%) say they have a retirement strategy. At the same time, 58% would give themselves a “C” grade for retirement savings, a new survey noted. The study found that most workers don’t accelerate their retirement savings until after the age of 60. When asked what they would do differently, 68% of participants said they would start saving earlier in life.
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