In the May issue of Advisor Today, a financial services publication (www.advisortoday.com), there was an interesting excerpt based on a recent study from the Spectrum Group (www.spectrum.com). The study focused on affluent investors, individuals with a net worth of $5 million or more.
The point made was that these individuals are looking for more safety in their investment portfolio. The study recorded findings that "43 percent of wealthy respondents said they were looking for a guaranteed rate of return for their investments,.....which may reflect the aging of this population and the overall investing environment." Interestingly, this number has increased from 38 percent in 2005 and 29 percent in 2003, according to the article.
I have not seen the entire study. I visited Spectrum's website to try and retrieve the data, but the complete report is very costly.
My takeaway is that advisors need to stress the importance of strategies that catter to the risk-averse, while still providing sufficient returns to justify the management expense. It is this belief that furthers my convicition for solutions like the Structured Sale, fixed annuites, and wealth managment that focuses on the clients needs not the institutions.
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