The financial crisis left many affluent investors skeptical about the integrity of financial institutions. While a great deal of that doubt has abated, some investors still harbor fears.
That's according to a study titled "Rebuilding Investor Trust" conducted by brand engagement firm Sullivan and Northstar Research Partners. The study surveyed more than 1,800 affluent investors and found that while eight in 10 strongly trust their financial institutions, they face apprehension about some issues and are looking for more help in navigating certain decisions.
According to the study, the main causes of this investor apprehension are concerns about healthcare costs, with 44 percent of investors having cited the possibility of large healthcare bills or serious illnesses as a top concern, as well as fears of sudden major declines in markets.
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More specifically, the study found that millennials are nearly twice as conservative in their investment strategies as they were two years ago and that women are 12 percent more conservative in their investments than men.
Affluent investors' reticence to take risks also extends to how they approach financial advisors. While investors want trustworthy help, they're cagey about who they trust. The study stated that fewer than half of investors disclose all of their assets to their financial advisors.
Even the physical proximity of the financial advisor can play a role in an investor's trust. The study found that only 8 percent of investors trust information they view on social media, and while 78 percent of investors trust their financial advisors, 58 percent prefer discussing information face-to-face rather than through other channels.
According to Tricia Benn, managing director at Northstar, these concerns among affluent investors offer opportunities for financial institutions to provide better guidance.
"Key investor concerns uncovered in this latest study show opportunities for deeper engagement between financial institutions and today's affluent investors, especially as it relates to healthcare costs, employer-sponsored retirement plans and the role risk plays in portfolio performance," said Benn.
Nancy Schulman, partner and executive director of strategy at Sullivan, agreed.
"While our study has found a revitalization in the relationship between investors and financial institutions, investors are hungry for more help from their advisors – beyond just advising on portfolio transactions," she said. "In a climate where the markets are up and trust is high, some investor segments have been left behind, and broad-based issues like healthcare costs need to be integrated into the conversation."
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