Industry Surveys

Young Affluent Investors More Conservative Than Elders - Merrill

Wendy Connett Editor New York 1 February 2011

Young Affluent Investors More Conservative Than Elders - Merrill

Young affluent investors are more conservative than their elder counterparts, according to Merrill Lynch’s latest Affluent Insights Quarterly survey. Fifty-nine per cent of American affluent investors aged 18-34 years described themselves as conservative compared to just over half (51 per cent) of those 65 and older. 

Forty-four per cent of respondents 35-50 years old and 39 per cent of 51-64 year olds said they are conservative. Overall, nearly half (47 per cent) of respondents said they prefer lower risk investments.

When asked during a conference call with journalists whether he saw the conservatism among younger affluent investors as a trend Lyle LaMothe, head of US Wealth Management for Merrill Lynch Wealth Management, said he views it as temporary. He added that it is not a mystery why they think this way given that the two biggest bear markets in history have taken place in the last decade. 

In terms of tackling that conservatism LaMothe said education and more interaction with this demographic are key.  

The survey also revealed gender disparities among affluent Americans. While overall top financial concerns among the affluent continue to be the rising cost of health care (64 per cent) and ensuring their retirement assets will last throughout their lifetime (57 per cent) these concerns are more prevalent among women.

Seventy per cent of women are worried about health care costs and 63 per cent about the longevity of retirement assets, compared to 57 per cent and 52 per cent of men respectively.

While 42 per cent of affluent non-retirees are confident in their ability to meet long-term financial goals, this percentage drops to one-third (34 per cent) among women compared to half (49 per cent) of men.

When all affluent non-retirees were asked what gives them confidence in their ability to meet long-term goals, they cited being heavily involved in their financial decisions (79 per cent), setting realistic retirement goals (76 per cent) and having a diversified portfolio (69 per cent).

The survey also found that the vast majority (84 per cent) of affluent Baby Boomers (age 46–64) believe their retirement will differ from that of their parents.

Among them 86 per cent intend to live a more active lifestyle and 72 per cent believe they will enjoy a higher standard of living during retirement than their parents did. Seventy per cent of these Baby Boomers plan to keep working, at least part-time, as a means of remaining active.

Braun Research conducted the survey by phone between December 8 and January 1 on behalf of Merrill Lynch Global Wealth Management. It surveyed 1,000 affluent Americans with investable assets in excess of $250,000.


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