Post Market-Drop, and Still Waiting for an Adviser to Call

During the storms of August, Republicans dropped equities like hot potatoes and Millennials turned to a familiar source of comfort. 

More than a month after the market dropped more than 600 points in one day, 17% of investors have yet to hear from their financial advisers, according to Spectrem’s Millionaire Corner.

In fact, according to Spectrem’s monthly Investor Pulse, more than one in five (21%)  investors with a net worth below $100,000 have been contacted by their financial adviser about the decline, adding credibility to a recent report that less-wealthy investors most often fire their advisers for not providing proactive contact.

Republican investors in August were more active in selling stocks (16%), compared with Democrats (9%) and investors who identified as Independent/Other (12%). Nearly one in five (18%) wealthier investors with $5 million or more in net worth liquidated equities (18%), fixed income (6%) and short-term investments (4%) during the decline, more than investors at all other wealth levels.

But not everyone ran for the exits. According to Spectrem’s survey, more than a third of investors (36%) with household incomes of more than $200,000 bought equities inside a traditional retirement plan, and 14% of those households purchased fixed-income investments. Most households (87%) with income under $100,000 kept their pocketbooks shut.

Equities in a retirement plan were popular in August with those ages 51 to 60, as 38% made purchases. Forty percent of those under 40 went for fixed income, and 20% of the under-40s bought short-term investments. Three-quarters of survey respondents age 61 and over did not buy anything inside their retirement plans.

When the stock market experiences a significant decline, younger investors are more likely to turn to the Web for answers, compared with older generations, Spectrem said. Twenty-five percent of investors under age 40 do more research online during periods of market volatility, compared with just 13% of investors age 61 and over.

The monthly Investor Pulse from Spectrem’s Millionaire Corner is fielded to approximately 1,200 investors, who answer topical questions that change monthly. The research is analyzed and segmented by age, gender, household net worth, retirement plan ownership, occupation, investment risk tolerance, marital status, investment knowledge and household income. Spectrem’s Millionaire Corner conducts the survey through an online panel and specifically targets selected wealth segments. The survey is completed by the person primarily responsible for making the day-to-day financial decisions within the household.