Advisers Boost Investors’ Retirement and Investment Confidence

According to the Legg Mason Global Investment Survey, investors who work with a financial adviser are more than twice as confident that they will have enough money to enjoy a comfortable life in retirement.

Additionally, investors working with an adviser are more confident their investments will perform well in the upcoming year. They also reported having more diversified portfolios, less reliance on U.S. stocks and were more willing to invest in environmental, social and governance (ESG) products.

However, only 39% of those working with an adviser said they were “very confident” about having enough money for a comfortable retirement, compared to 13% of those not working with an adviser. Among those who were less confident, 20% of investors without an adviser were “very concerned” about having enough money for a secure retirement, compared to only 11% of those with an adviser.

Forty-four percent of investors with an adviser view volatility as a positive, if managed properly. By comparison, only 27% of investors without an adviser share this view.

Seventy-two percent of investors with an adviser are confident in their investments over the next 12 months, with 32% saying they are very confident. Only 52% of those without an adviser are confident in their investments over the next 12 months, and a mere 7% of those without an adviser are very confident. Sixty-one percent of those with an adviser plan to increase their contributions over the next five years. This is true for only 34% of those without an adviser.

Additionally, 60% of those working with an adviser think U.S. equities will offer the best opportunity over the next 12 months, compared to 44% of investors without an adviser.

Investors with an adviser are also more likely to diversify their portfolios. Thirty-one percent of those with an adviser believe that real estate offers a good opportunity, compared to 18% of those without an adviser. Twenty-four percent of those with an adviser point to domestic bonds (versus 13% without). Twenty-one percent of those with an adviser like gold and metals (versus 11% without), and 14% of those with an adviser like international bonds (versus 1% without).

“By helping investors focus on the long term, financial advisers can provide a steadying voice of reason,” says Thomas Hoops, executive vice president and head of business development at Legg Mason. “Investing can be a very emotional process, especially in times of market volatility, and an experienced financial adviser is often integral to keeping investors on track to achieving their goals.”

Research Plus Ltd. conducted the online survey of 1,000 investors who plan to invest a minimum of $50,000 over the next 12 months. It was fielded in July and August.