BlackRock and Legg Mason Reveal Investor Fears

by on Aug 07, 2017

BlackRock and Legg Mason both released their global investor surveys, focusing on sentiment, behaviors and trends in 2017. Both firms touch on similar themes, discussing the roles of technology, retirement and long-term goal planning. Legg Mason provides insight into investors’ motivations and biases, comparing perception, reality, technology and experience. BlackRock also analyzes investor sentiment by focusing on retirement, savings and financial advisors. Each firm repurposes survey findings in standalone pages with interactive charts, graphs, images and statistics. Below, we spotlight three interesting conclusions from the surveys.

Decoding Investor Behavior – Legg Mason 

  • Investor Confidence Has Declined

Legg Mason’s Decoding Investor Behavior survey states that investors are still heavily influenced by the legacy of the 2008 financial crisis. Two charts illustrate that investors are cautious due to fears of a repeat recession. The first chart compares the extent of influence of the Global Financial Crisis on saving and investment decisions, reflecting a fearful attitude that focuses more on saving than investing. The chart also demonstrates that investors are cautious and careful globally, not just domestically. Blackrock’s Investor Pulse highlights decreasing investor confidence due to the concerns about health care and cost of living. Retirement, increasing longevity and pensions are the most pertinent topics concerning respondents.

Decoding Investor Behavior – Perception Versus Reality

  • Gen Xers and Millennials Don’t Feel Prepared for Retirement

Legg Mason suggests that younger investors are pessimistic about retirement savings due to student loans and home mortgages. Baby boomers benefited from equity and bond bull runs, as well as defined benefit pension plans but are still suffering from under-saving. Half of the world’s 55-76 year-olds have not saved enough for a comfortable retirement. BlackRock demonstrates that 40% of Americans have not begun saving and only 36% of Americans feel confident about their retirement income. Additionally, the firm details investors’ top concerns toward retirement, such as physical decline, outliving savings and cognitive decline.

Decoding Investor Behavior – Youth Versus Experience 

BlackRock Investor Pulse Survey

  • Americans Are Satisfied with Financial Advisors

BlackRock exclusively discusses the role and benefits of advisors. According to the survey, 71% of Americans are highly satisfied with their advisors, particularly in helping navigate volatility. The strongest driver of satisfaction is advice dealing with the investor’s risk profile. Those working with financial advisors are more invested in long-term objectives and financial markets. Investors are most interested in full transparency and an education on risk in their portfolios.

BlackRock Investor Pulse – The Role of Advisors