In a recent survey of more than 5,700 adults, respondents cited the top five financial areas where there was an unmet need for advice – an advice gap. The topics included handling market volatility, choosing investments, estimating required minimum distributions (RMDs), making buy/sell decisions on investments, and estate planning. Calculating RMDs was among the top five concerns across all age groups. Estate planning advice was an unmet need across all income levels. More households sought help for multiple financial tasks in 2021, with growth driven by households with $100,000 to $500,000 in assets.
Investor sentiment grew more bearish in the AAII Investor Sentiment Survey for the week ended January 12, 2022. The percentage of those citing a bearish sentiment – the belief that stock prices will decline in the next six months – increased to 38.3% from 33.3% in the previous week. A bullish sentiment — the belief that stock prices will rise — dropped to 24.9% from 32.8% in the prior survey. The number of people citing a neutral view increased by 2.9 percentage points.
Student debt has impacted Millennials more than any other generation according to a new study. Many Millennials feel financially stalled by rising college costs and the ongoing economic recovery. The research looked at the impact of student and medical debt keeping many Millennials from saving and building credit to buy a home. Among respondents, 40% said student debt has had a “moderate” to “very strong” negative impact on their plans to purchase a home.
The number of mergers and acquisitions among advisory firms has been climbing and is expected to continue to rise, according to a new report. Valuations of registered investment advisory firms have also increased, the report found. In 2021, M&A deals rose by 50%. Nearly two thirds of respondents said they believe M&A will increase in 2022.
Nearly two thirds (62%) of businesses with a 401(k) plan used auto-enrollment in 2020, compared with 60% the previous year, a study found. In addition, most employers used a 6% default deferral rate of income for the first time in 2020, versus the prior average of 3%.
The trend in early retirement among workers 55 and older continues. A recent report found that nearly 70% of the 5 million people who left the labor force in 2020 are over the age of 55. In addition, the rate of those retirees taking new jobs has declined. Investing and increasing property values may have helped many Baby Boomers retire, the report concluded.
ESG (environmental, social, and governance) investing grew exponentially in 2021. An estimated $120 billion was invested in ESG investments in 2021 compared with $51 billion in 2020, according to a recent report. The asset flows represented a continuation of a positive trend. The amount of assets invested in ESG increased tenfold from 2018 to 2020.
A recent survey of millionaire investors found 55% expect to sell some assets in the coming year, including stocks and real estate, due to potential tax changes. The survey included individuals with $1 million or more in investible assets. Responses varied across generations, with 90% of Millennials, 54% of Gen Xers, and 29% of Baby Boomers stating they plan to make a change.
Few adults report feeling confident about their financial health. A recent survey found 5% of adults see their finances as “rock solid.” Nearly half (47%) of respondents described their financial condition as “a work in progress.” Baby Boomers were the most confident generation with 29% of respondents describing their financial health as “fit.” Gen Xers were the most skeptical or pessimistic. The top financial resolution for 2022 was increasing savings, cited by 59% of those surveyed.
Most investors chose to stay the course with their portfolios in 2021, a recent study found. The majority (81%) of respondents said they were satisfied with how they managed their investments this year, compared with 71% in last year’s survey. In addition, 43% said the top lesson learned this year is that it’s better to stay the course when investing. At year-end, 43% of investors said they plan to check in with a financial advisor and 41% said they will use online tools to review their portfolios.