OMAHA, Neb., September 19, 2022 – Orion Advisor Solutions’ inaugural Mind and the Market Investor Sentiment Survey reveals that 66% of investors have a positive frame of mind about their financial future, with four in 10 survey respondents characterizing their mood as confident. The survey results also show Millennials and investors who work with a financial advisor are generally more optimistic about their own financial future, the U.S. economy, and the U.S. financial markets than other groups.
Half of the surveyed investors are pessimistic about the economic outlook of the U.S. and 52% are pessimistic about the global economy over the next six months. More than one-third (36%) of investors are expecting poor market performance over the next six months with 45% expecting lower investment returns in 2022 versus 2021. Investors indicated their top concerns center around market conditions – including inflation – market volatility, and the U.S. political climate. To address their concerns about meeting their financial goals, investors said they are primarily focused on saving money, specifically by holding off on big purchases and reducing discretionary spending. Some have also adjusted their retirement plans and/or contributions.
“In a recurring quirk of human psychology, we see that investors can be pessimistic about the broader market and economy while remaining optimistic about their personal economic and investment prospects,” said Dr. Daniel Crosby, Chief Behavioral Officer at Orion. “Financial advisors who understand the disconnect between personal and aggregate sentiment are well-positioned to provide high-quality, individualized advice during periods of uncertainty.”
The survey also revealed key generational differences on topics, including outlook on the economy, stock market and their own financial futures.
- Optimism about the U.S. economy is higher among Millennials (64%) than among Gen X (35%) and Baby Boomers (22%).
- Millennials (62%) are more likely to indicate a positive outlook on the stock market than are Gen X (30%) or Baby Boomers (14%).
- Millennials (82%) are much more likely to have a positive mood regarding their financial future, compared to Gen X (61%) and Baby Boomers (59%).
- Millennials (38%) are more likely than Gen X (23%) and Baby Boomers (7%) to increase investment in the stock market as a way to address their concerns about money and meeting their financial goals over the next six months.
- Millennials (50%) are the most likely to consult a financial advisor, compared to Gen X (32%) and Baby Boomers (27%).
“The optimism among Millennials toward the economy and the stock market is not surprising given their demographically driven longer-term time horizon than Gen X and Baby Boomers,” said Tim Holland, CFA, Chief Investment Officer at Orion. “Financial advisors who view the recent market pullback as a buying opportunity would likely find a receptive audience for that message among existing and prospective Millennial clients. Considering Millennials are much more interested in working with an advisor than their Gen X and Baby Boomer peers, finding relevant and timely reasons to engage with that demographic cohort should prove beneficial to the advisor and their practice over the long-term.”
Investors working with a financial advisor have more positive outlooks on the economy and their financial futures than investors who are not working with a financial advisor. Orion’s survey reveals:
- Four in 10 (42%) investors working with an advisor have an optimistic outlook for the U.S. economy over the next six months, compared to 24% of investors not working with an advisor.
- Thirty-seven percent of those working with an advisor have a positive outlook on the stock market over the next six months, compared to 20% of those not working with an advisor.
- Thinking about their investments and ability to reach their financial goals, 31% of those working with a financial advisor have a more positive confidence level compared to a year ago, compared to 21% of those not working with an advisor.
The Orion Advisor Solutions Mind and the Market Investor Sentiment Survey is an annual study that provides insights on investors’ mood and outlook on their financial futures. It found the pandemic motivated investors to commit to saving and investing for the future and to focus more on wealth preservation and the safety of their assets rather than on seeking higher returns. Other highlights include:
|Changes to investment goals post-COVID||Top investor concerns||Making changes to reach financial goals|
|Investment goals have not changed (45%)||Inflation (61%)||Consulting a financial advisor (34%)|
|More committed to saving, investing for the future (26%)||Market volatility (36%)||Holding off on big purchases (34%)|
|More interested in wealth preservation and safety of assets vs. seeking higher returns (25%)||Potential for recession (34%)||Reducing discretionary spending (33%)|
|Thinking more about the impact of insurance on financial plan (16%)||The U.S. political climate (34%)||Adjusting retirement savings contributions (20%)|
|Adjusted portfolio to be more resilient (15%)||Tax policy (21%)||Increasing investment in the stock market (19%)|
|Seeking more investments that align with environmental, social and governance themes (14%)||Rising interest rates (21%)||Reevaluating retirement timeline (15%)|
|Planning to work longer (10%)||Healthcare costs (16%)||Decreasing investment in the stock market (12%)|
TRUE Global Intelligence fielded a 7-minute survey from Aug. 22 to Aug. 26, 2022, of 500 U.S. residents with annual household incomes of at least $150K. Respondents must also have investments in, at a minimum, one of the following areas: stocks, bonds, or mutual funds.
About Orion Advisor Solutions
Orion is a premier provider of the tech-enabled fiduciary process that transforms the advisor-client relationship by enabling financial advisors to Prospect, Plan, Invest, and Achieve within a single, connected, technology-driven experience. Combined, our brand entities, Orion Advisor Tech, Orion Portfolio Solutions, Brinker Capital Investments, Redtail Technology, and TownSquare Capital create a complete offering that empowers firms to attract new clients seamlessly, connect goals more meaningfully to investment strategies and outcomes, and ultimately track progress toward each investor’s unique definition of financial success. With the addition of Redtail and TownSquare, the combined platform services $3 trillion in assets under administration and $59 billion of wealth management platform assets (as of July 1, 2022). Supporting over 5 million technology accounts and thousands of independent advisory firms, Orion is the platform of choice for all growth-focused advisory firms looking to strengthen their client relationships, gain a competitive edge in a crowded marketplace, and build strong, profitable businesses. Learn more at www.orion.com.