U.S. investor confidence reached a seven-year high in the second quarter, with the Wells Fargo/Gallup Investor and Retirement Optimism Index registering +70 in May. The index had a baseline score of +124 when it was launched in October 1996. It peaked at +178 in January 2000, at the height of the dot-com boom, and hit a low of -64 in February 2009 following the Great Recession.
This quarter, confidence among retired and non-retired investors was nearly neck and neck, with the index registering +67 for retirees and +70 for non-retired investors.
More than two-thirds (69%) of non-retired investors say they have a formal financial plan to reach their retirement goals, with roughly half that (36%) saying it is a written plan, up from 2011 when less than a quarter had a written plan. Nearly three-fourths (74%) of non-retirees with a written plan said they developed it with the help of an investment adviser.
Retirees are only a bit more diligent about their retirement plan, with 73% having a financial plan and 43% having a written financial plan. Retirees are also more likely to stick closely to what is in their plan than non-retirees (63% vs. 48%).
The majority of both retirees and non-retirees are highly or somewhat confident that their plan will succeed in helping them reach their financial goals, with 94% of retirees agreeing with this statement and 89% of non-retirees concurring.NEXT: Online tools sought in partnership with working with an adviser.
When it comes to accessing financial advice, the majority of investors value access to online investing tools (71%) as well as a strong relationship with a financial adviser (70%). However, when asked to rank the three financial resources most important to them, a strong relationship with a financial adviser came in first, cited by 50%, followed by online tools (24%) and on-call access to a financial adviser (9%).
Asked about their ideal financial advice format, most investors would like a blended approach that includes both advisory and online input, but respondents were split in their preferred adviser/tool ratio. Four in 10 (39%) want the focus to be mostly on working with the adviser, with the online component added on, while 26% want the emphasis to be on the online tools, with working with the adviser as secondary to that. Less than one-quarter (23%) want their financial advice exclusively with a financial adviser, and just 9% want it entirely online.
“Technology is constantly evolving and changing how investors want to interact with their financial services firm,” says Mary Mack, president of Wells Fargo. “Through this data, investors are telling us they truly value a personal relationship with an adviser, who also uses technology in a collaborative way.”
Asked about five possible financial worries, investors are most concerned about identity theft (cited by 57%), followed by cyber-attacks on their savings or investment accounts (47%), stock market volatility (42%), investment fraud (41%), and financial abuse or exploitation of older family members or friends (32%). In fact, 32% of investors know an elderly person who has been the victim of financial abuse, and 47% say they are very or somewhat likely to work with a financial adviser to protect themselves or elderly family members.“Over the past three years, we’ve been seeing reports of such abuse coming in from our advisers, and, unfortunately, we expect to see that growth continue as our population ages,” Mack says. “Financial firms must take an active role in raising awareness and preventing elder fraud and financial abuse, including expanding training and guidance for clients.”