According to Hearts & Wallets, more than 4,000 U.S. households said many of them are taking over the responsibility for their own financial planning, but many don’t know enough to make informed choices.
Only 42% of Americans rate their providers a nine or 10 on a 10-point trust scale, according to the announcement. In focus groups, investors say they evaluate whether providers are “knowledgeable” and “tactical” to determine trustworthiness. Through regression analysis, researchers said they discovered the key trust driver is “Has Made me money.”
“Advice is important since only 60% of Americans in or approaching retirement have a solid or written income plan,” said Chris Brown, one of the study authors. “Of those, 57% developed their own plan, and plans have on average only 4.1 of the 8 components that we view as important for a robust retirement income plan. Retirees are struggling to make informed income drawdown choices. Thirty percent of those without pensions are drawing down income at unsustainable rates of 7% or more.”
The news release said the poll confirmed an anticipated ramp-up in savings by a major, emerging group of American investors, which it said was a demographic often overlooked in the focus on the Baby Boomer bump: Accumulators (investors ages 28 to 64 who are at least five years away from retirement) had assets of more than $12.9 trillion at the end of Q2 2010. Accumulator investable assets are projected to reach nearly $14.3 trillion by 2012 with most growth coming in younger market segments of savers in their 40s and younger, the announcement said.
Overall, investable assets of U.S. households stood at $27.1 trillion as of Q2 2010, down $1.3 trillion from Dec. 2009. Of 116 million households, Emerging/Early Career investors (beginning savers in their late 20s through 30s) are the largest lifestage with about 44 million households.
In overall market share, the study found Fidelity Investments and Bank of America led, having relationships with 16% and 15% of respondents respectively. Bank of America Merrill Lynch has the highest share of wallet. USAA leads all firms by a wide margin in the Hearts & Wallet Score, a measure of intent to recommend and intent to invest more, the news release said
Discount brokers lead with High Net-Worth investors, Pre-/Post-Retirees and young investors. Full-service firms lead only with retirees and those having more than $500,000 in assets.