What do investors want?
According to a survey released on Thursday by MFS Investment Management investors want advisor contact and education. In turn, those investors who are more knowledgeable tend to be less fearful about investing – good news all around.
The MFS survey revealed that during times of volatility 20% of survey respondents said they would prefer a weekly email from their advisor as opposed to a phone call, in person meeting or mailing. Meanwhile, they would like only monthly or quarterly phone calls and quarterly or annually in-person meetings.
“Education might be what is needed the most to help build the confidence of investors, especially for those classified as fearful,” said Bill Finnegan, director of Global Retail Marketing for MFS, in a statement. “We're closing out a decade book-ended by the dot-com bubble burst and the worst recession since the Great Depression — perhaps reengaging with clients about investing basics would be a good place for advisors and their clients to start, to help to make the novice less nervous.”
Nonetheless, more investors are optimistic: While 12% of respondents said they were fearful, 18% are hopeful and 11% are opportunistic. Of those who are fearful, 89% are very worried about another serious drop in the stock market, 73% have lowered their expectations about what life will be like in retirement, 71% are pessimistic in their outlook for the U.S. economy over the next five years, 62% prefer low risk investments today even if means low returns, 61% identify themselves as a saver more than an investor, 54% agreed that they will never feel comfortable investing in the stock market again, 49% are overwhelmed by all the different investment choices they have available to them, 48% said their need for financial advice has increased since the downturn, 39% decreased their contributions to 401(k) plans and Individual Retirement Accounts (IRAs), and 37% said their portfolios are in cash.
Those who are more knowledgeable about investing were more likely to say they were hopeful or opportunistic. For those who are “opportunistic,” 54% considered themselves to be very knowledgeable or even an expert about investing and only 3% considered themselves to be novice investors, compared to 35% of fearful investors who considered themselves to be novices and only 16% considered themselves to be knowledgeable about investing.