Five years after the height of the financial crisis, affluent investors have dramatically regained faith in their financial institutions, with about 8 in 10 reporting they strongly trust their financial firms. Despite this turnaround, which includes higher levels of overall investor satisfaction and portfolio performance, addressing concerns related to healthcare costs and the fear of risk – particularly amongst millennial and female investors – are major opportunities. These are among the key findings of the Rebuilding Investor Trust study, today released by Sullivan, a top brand engagement firm, and Northstar Research Partners, a global market research consultancy.
The study, now in its fourth edition, includes responses from more than 1,800 affluent investors. Key findings from the study include:
- Fear about healthcare costs erodes investor confidence: When investors lack confidence, healthcare cost concerns are often the culprit – 44 percent of investors cite healthcare expenses or serious illness as top concerns, followed by major market declines.
- Millennial and female investors don’t see portfolio increases: Even with strong market performance overall, 59 percent of affluent millennial and 36 percent of female investors have flat or decreased portfolio performance. Reluctance to take risk could be a key factor – millennials are almost twice as conservative today as they were in 2012 and women are 12 percent more likely to be conservative investors than men.
- Investors want more holistic help but they’re hiding wealth: Fewer than half of investors disclose all their wealth to their advisors, keeping an average of 30 percent of investment assets hidden.
- Social media isn’t getting the traction it’s getting in other industries: 78 percent of investors strongly trust communications that come from their personal advisors, compared to only 8 percent viewing social media as a trustworthy information source. 58 percent of investors prefer in-person contact.
- Even the affluent don’t understand what they’re paying: 27 percent of investors don’t know the amount they’re paying advisors, half of which (14%) are unaware that they pay any fees at all.
“While our study has found a revitalization in the relationship between investors and financial institutions, investors are hungry for more help from their advisors – beyond just advising on portfolio transactions,” said Nancy Schulman, partner and executive director of strategy, Sullivan. “In a climate where the markets are up and trust is high, some investor segments have been left behind, and broad-based issues like healthcare costs need to be integrated into the conversation.”
Tricia Benn, Managing Director, Northstar, couldn’t agree more: “In conducting this research over the past five years, we’ve tracked tremendous change among the affluent investor community. Key investor concerns uncovered in this latest study show opportunities for deeper engagement between financial institutions and today's affluent investors, especially as it relates to healthcare costs, employer-sponsored retirement plans and the role risk plays in portfolio performance.”
Research Methodology
The results are based on 1,823 online surveys with affluent households ($100K+ investable assets, excluding real estate and workplace retirement plans) – including an estimate of 275 individuals with investable assets in excess of $1 million.
Rebuilding Investor Trust details specific, pragmatic steps an institution can take to grow relationships with its customer base. To learn more about this research, please visit http://rebuildinginvestortrust.com/
About Sullivan
Sullivan is a brand engagement firm that connects customers to brands at the very moments they are likely to make decisions. The firm's capabilities span all aspects of strategy, design and delivery, across traditional and digital media. Sullivan boasts relationships with many blue-chip for-profit and not-for-profit clients, including American Express, Merrill Lynch, Duke University, UPS, LinkedIn and WebMD. In 2014, Sullivan was named to Inc. Magazine's List of Fastest Growing Private Companies in America for the fifth year. For more information, please visit sullivannyc.com.
About Northstar Research Partners
Northstar, a member of the MDC Partners Network, is a leading global strategic marketing insights and consulting firm. With locations in Toronto, New York, London and Atlanta and execution of strategic consulting and research projects in 60+ countries. Northstar is the recipient of numerous awards, including the MRS/AURA Award for International Research, as well as the prestigious Grand Ogilvy and Gold Prize at the Ogilvy Awards. For more information, please visit northstarhub.com.
