Although many Americans are still skittish about investing in equities markets, enough are exuding the newfound confidence that could translate into solid business prospects for financial advisors, according to AlixPartners, a New York-based research firm.
In its U.S. Financial Services Industry Outlook study, released on Tuesday, AlixPartners found that 13% of respondents overall and 18% of self-described investors have stepped up their investing activity. The numbers look even better on a three-year timeframe, as 48% of Americans and 57% of self-described investors are planning to invest.
But that small slice seems to be getting in at the right time. The S&P 500 has moved up 15.11% since the rally began in early December, and AlixPartners found that 77% of Americans plan to work with a financial advisor as they do more with their investing dollars.
What’s more, they are opting for stability in the U.S., while pursuing growth opportunities offered by the dominant emerging-market economies—Brazil, Russia, India, Indonesia and China (BRIIC). About 21% of investors who plan to be more active said they would boost their allocations in U.S. equity and bond markets, while 17% cited a preference for investing in the BRIIC countries, and just 8% planned to put more money to work in European opportunities.
As for specific sectors, investors also appear to prefer high-growth sectors like oil and gas, and telecommunications, according to Stefano Aversa, a co-president of AlixPartners.
The only drawback to the study seems to be that a larger share of Americans are staying put, in terms of investing. According to the study, 42% of respondents say they have not changed their investment behavior since mid-2010, and just 14% say they are now more likely to invest, down five percentage points since May. Also, 10% of Americans say they have reduced their investing activity since mid-2010.
Aversa plans to chair a panel called “What If Another Mega-Bank Fails?” at the World Economic Forum in Davos, Switzerland. But Americans in the study did not seem to show much pity for that sector’s plight. A majority of respondents said that banks and other financial institutions that received aid during the financial crisis should be forced to provide more loans, reduce fees and otherwise do more for the U.S. economy and consumers, according to AlixPartners.
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