Headlines you need to know this week
Sustainable investing is a standard practice, survey findsSustainable investing has become a standard part of the investment process for many asset managers, new research found. The survey noted that 84% of asset managers were either implementing or evaluating sustainability factors when selecting investments. The research also found the rate of adoption of sustainable investing is highest in Europe, the Middle East, and Africa. In North America, the number of firms embracing sustainable investing rose to 68% in 2021 from 39% in 2018.
Some workers reduce saving due to health costsAbout one third of workers have decreased their retirement savings contribution to pay for rising health costs, according to a new financial wellness survey. The study also found that about half of workers (49%) are “moderately concerned” about their household financial well-being. Also, two thirds of respondents cited debt as a problem.
Investor optimism declinedInvestor optimism declined, according to a recent AAII Investor Sentiment Survey. The number of investors expecting the price of stocks to rise in the next six months declined in the survey ended October 6, 2021, compared with the previous week. The percentage of respondents citing a bearish sentiment, that stock prices would fall in the near term, also fell. An increasing number of respondents reported a neutral outlook.
Men over 45 more likely to sell when markets tumbleMen over the age of 45 are more likely to panic when there is a market downturn and sell off their stocks, according to new research from MIT. The study analyzed more than 600,000 brokerage accounts. The researchers defined a panic sale as a drop of 90% of a household account’s equities over a one-month period, in which 50% or more of the decline is due to trades. The study also found that individuals with less than $20,000 in their portfolios tend to sell off equities more frequently.
Many parents delay retirement due to college debtOne quarter of parents who borrowed from the federal government to pay for their child’s education don’t expect to retire as planned because of the debt, a survey found. In addition, 20% of parents reported they regret taking out the loans. The survey noted that student loan debt is affecting families across generations. A separate study in October 2020 found that nearly 40% of individuals involved in loan repayment are helping someone else pay off student loan debt.
Affluent donors gave more in 2020Affluent Americans gave more to charity in 2020, according to a new report. The majority of wealthy households (88%) donated an average of $43,195 to charity, reflecting a 48% increase from $29,269 in 2017. The study found that older individuals were more likely to give to charity. Also, 92% of women compared with 86% of men were likely to give in 2020. Affluent households were defined as those with a net worth of $1 million or more, and/or an annual income of $200,000 or more.
Savers use HSAs for current expensesSavers using Health Savings Accounts (HSAs) are primarily using the funds for current expenses, and not investing, according to new research. The study found that only 9% of accounts were investing in 2020, up from 2% in 2011. Just 4% of accounts that were open for one year had investments, compared with 13% of accounts established for 10 years. Some accounts require a $1,000 account minimum to invest. The report also noted that many account owners may not realize they can invest the funds.
Investors say 2020 changed their outlookIn a survey of high-net-worth investors, 70% reported having a solid relationship with their financial advisor during 2020. While a minority of respondents indicated they had been negatively impacted financially last year, two thirds of respondents indicated they have changed how they think about the future due to the pandemic. Among those, 25% of respondents said there was a change in what they considered important, 20% worried about their financial future, and 19% changed what they want to do in retirement. Most surveyed said they would like to see their advisors hold more client reviews.
Younger workers stressed over financeYounger workers may find financial stress is impacting their job performance more than other generations, according to a new survey. The study found that nearly 44% of Gen Z and 38% of Millennials said financial stress had affected their ability to do their jobs in 2020, compared with 24% for all other age groups. In addition, one third of Gen Z and Millennials participating in 401(k) plans said they expect to delay their retirement due to the pandemic, compared with one fifth of Gen X.
Most 401(k)s untapped in 2020Despite the financial stress of the pandemic in 2020, most workers did not take withdrawals from their 401(k) plan, and the majority continued to contribute, the Investment Company Institute (ICI) found. The ICI reported that 1.1% of savers in defined contribution plans stopped contributing in the first half of 2021, compared with 2.0% in the first half of 2020. The number of savers taking withdrawals remained static with 2.8% taking out funds in the first half of 2021 as well as the first half of 2020.
Tech influences investor satisfactionA new study found that technology plays a role in investor satisfaction with a wealth management firm. The survey found that overall client satisfaction was linked to a firm’s level of technology and digital capabilities during 2020. Most respondents (84%) said they were satisfied and viewed their wealth management firm as a leader in technology. Also satisfied were the nearly three quarters (70%) of respondents who said they saw their firm as comparable to others in terms of technology. Among those who said their firm lagged others, only 38% reported satisfaction. More than half of those surveyed said they want their advisor to use technology to answer questions about their accounts.
Gen Z seeks financial adviceWhile many are just beginning their careers, nearly one quarter of Generation Z are seeking professional financial advice, according to a new study. The so-called Gen Zers represent the youngest segment of investors. The oldest Gen Zers are 24. The group surveyed noted they want expert financial advice due to the pandemic and its impact on the economy and markets. Respondents also noted that their top financial priorities were paying bills, saving for retirement, and paying off debt.
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