Ripe Time to Reevaluate Clients' Investment Approach – Planadviser.com

Nearly half of Americans (49%) say they’ve yet to reevaluate their investment approach despite being in a changing investment landscape characterized by low global interest rates and uneven economic growth, according to new research by Dreyfus.

The study shows this inertia is more common among older investors, even though this group has experienced massive economic shifts ranging from the stock market crash of 1987 to the financial crisis of 2008. According to the study, more than half, or 61%, of those who are at least 55-years old say they have not or will not change their investment approach. However, 65% of those between the ages of 21 and 34 said they already have evaluated their investment strategy for appropriateness in the emerging environment.

“As long-term risk/return expectations have shifted with an increase in inflation, the rise of U.S. nationalism and record-low volatility, investors would be well-served to reevaluate their portfolios in light of changed circumstances to determine if they will continue to meet their investment objectives,” observes Mark Santero, chief executive officer for the Dreyfus Corporation, a BNY Mellon company.

Additionally, the study finds that those working with advisers, especially younger people, are more likely to update their investment approach compared with those who aren’t working with advisers. Younger investors between 21 and 34 (63%) also indicate they have worked with an adviser in reevaluating their investments, while only a third (38%) of those 55 or older have evaluated their investments with an adviser.

These findings may suggest plan sponsors can benefit from targeted communication about investments geared toward older participants and those not working with advisers. Santero adds, “We believe investors who don’t work with a professional adviser could greatly benefit from the insights an adviser can provide in tailoring a goals-based approach for their individual circumstances against today’s investing environment of uneven economic growth. Options might include diversifying their U.S. exposure with global fixed-income and equities or considering dividend or alternative investing strategies.”

The survey shows six in 10 investors (60%) without a financial adviser say they are likely to put off their plans to address today’s market challenges, with only one-quarter (24%) saying that they plan to address challenges they face at some point in 2017.

The “Helping Meet Investor Challenges Study” surveyed 1,250 investors with $50,000 or more in investable assets on their approach to investing. The full results can be found at BNYMellon.com.