Three-quarters of investors say they are interested in products unrelated to the performance of the broader markets. And a solid majority (61 percent) do not believe the traditional equities/bond approach to portfolio allocation is the best way to pursue returns and manage investments, according to new research.
The Natixis Global Asset Management (NGAM) Durable Portfolio Construction Research Center discloses these findings in an annual global investor survey of more than 750 American investors. The survey included more than 5,650 investors in 14 countries from Asia, Europe, the Americas, the Middle East and the United Kingdom.
Almost three out of four investors (72 percent) say they would consider alternative investments if their advisor recommended them. And 74 percent say advisors are increasingly discussing alternatives with them, the report shows.
The latter figure represents a sizable increase from the 2011 survey, when 1 percent of investors said advisors were discussing alternatives with them, and from 2012, when 35 percent said the same.
The NGAM survey adds that Americans are generally optimistic, with more than half (53 percent) expecting their financial situations to improve over the next 12 months. Many (89 percent) are also confident that their current investment strategy has them on pace to meet their retirement savings goals.
Most (54 percent), however, say they don’t have a financial plan, and 45 percent say they don’t even have clear financial goals. Those who do have plans estimate they will need 62 percent of their pre-retirement income to live in retirement — significantly less than the 70 to 80 percent commonly used for planning purposes.
The investors surveyed identify the following as their top ten financial threats to retirement:
1. Long-term care costs not covered by insurance: 40 percent of respondents
2. Significant reduction in retirement savings or investments due to market conditions: 36 percent
3. Insufficient proceeds from defined-contribution plan: 27 percent
4. Unemployment: 22 percent
5. Physically incapable of working: 21 percent
6. Insufficient proceeds from my pension or defined-benefit plan: 20 percent
7. Cost of college education for my child/children: 19 percent
8. Insufficient sale proceeds from primary residence: 16 percent
9. Cost of caring for children/grandchildren: 16 percent
10. Cost of caring for elderly family members: 15 percent
If their retirement funds fall short and they are incapable of supporting themselves, 40 percent of investors say they will rely on family members to fill the gap while 38 percent will look to government programs. Nineteen percent said they would rely on post-retirement work.