Hancock Offers Solution to Lagging Client Involvement

John Hancock found that 88% of advisers have urged clients to get back in the investing game, but most are not heeding the advice.

In a recent survey of advisers about their clients’ attitudes toward the markets and investing, John Hancock Funds found a strong preference by clients to remain in cash and short-term instruments, even though most advisers have encouraged them to move back into an investing mode.  The survey was sent to advisers in late September and nearly 400 advisers responded.

Also among the survey’s key findings:

  • Only 12% of advisers report being hesitant to invest right now, whereas they say nearly 88% of their clients are hesitant.
  • Seventy percent of advisers think their clients have too much money in cash, including savings deposits, money market accounts, and short term instruments.     
  • Nearly an equivalent percentage (69%) of clients do not think they have too much in cash.
  • Among the reasons clients give for their inactivity:  34% said they were concerned about the economy, 26% said they are “scared,” and 23% think the market will dip again.
  • Advisers say more than 47% of their clients plan to invest their cash within six to 12 months, with 18% having a three to six month time horizon, and nearly 12% saying “never.”

As a way to help advisers who believe their clients may be missing out on the early phase of a market recovery, John Hancock Funds launched, “Getting Clients Off the Sidelines,” a new program offering tools and materials designed to guide conversations with clients. The program includes case studies of representative clients, and suggested mutual funds that could be used in putting cash back to work, and a series of sales tools, including videos and client-approved interactive charts and reports. It may be accessed by visiting www.jhfunds.com/HardWired.

“Advisers are caught in a dilemma. They know their clients stand to lose money by remaining in cash and that the prudent course of action is to adopt dollar-cost-averaging back into stocks, starting now,” said Keith F. Hartstein, President & CEO, John Hancock Funds. “The materials in our new program are intended to foster more effective conversations between adviser and client that can begin to address this problem.”