By Warren S. Hersch
Main Street investors remain pessimistic about their finances five years after the financial crisis, according to the "2013 Mass Affluent Investor," a new study released this week by Spectrem Group.
The mass affluent
don't feel wealthy enough to require financial advising services, though they have a net worth of $100,000 to $1 million (not including primary residence). Many of them also say they haven't built enough wealth to achieve financial goals like a comfortable retirement. At the same time, Mass affluent investors are reluctant investors who report a low tolerance for risk.
"Mass affluent investors can benefit greatly from financial advising services, but they're significantly less likely than millionaires to seek out the counsel of a financial advisor due to perceived risks," says George Walper Jr., president of Spectrem Group. "The latter leaves them vulnerable to running out of money in retirement and falling short of other financial goals
. Considering the mass affluent market represents some 28.4 million U.S. households, the problem has broad societal implications."
Highlights from the "2013 Mass Affluent Investor" report include:
- Prevailing Pessimism: Fewer than half of the respondents indicate their finances are in better shape now compared to a year ago. And only 46 percent expect their situation to improve in the coming year.
- Lone Rangers: Roughly one-fourth work regularly with a financial advisor. But less than one-third want to be actively involved in the day-to-day management of their finances; and a large share say they have little or no investment knowledge.
- Risk Averse: Less than one-third are willing to take significant risks with a portion of their investments. And 21 percent say they regret not investing more conservatively in the years leading up to the financial crisis.
- Retirement: More than 40 percent are unsure of having sufficient income to live comfortably in retirement, and 40 percent plan to work past the age of 65. Close to 40 percent of those younger than 54 say their household is not saving enough.
- Concerns: The mass affluent are primarily worried about maintaining their own financial position, but close to 60 percent are worried about the financial situation of children and grandchildren. And more than half indicate they are caring for aging parents.
Originally published on LifeHealthPro.com