Presidential Election Top Concern of Mass Affluent and High-Net-Worth Investors
One-third of investors moved funds out of equities in the past year, and an equal number plan to do the same in the coming year, according to a survey.
Uncertainty over the upcoming presidential election is the top concern of mass affluent and high-net-worth investors, according to a new survey by Janus Henderson Investors, which also revealed a continuing move away from equities.
The survey of 1,000 investors found that 42% are very satisfied with their current financial situation, down from 48% a year ago, and 67% say the cost of living is going up faster than their income.
Political turmoil is weighing on investors’ minds, with 78% of respondents expressing concern about how the upcoming presidential election may impact their financial situation over the next 12 months. That’s more than those who are chiefly worried about persistent inflation (70%), high interest rates (57%), poor stock market performance (57%) or a potential recession (55%).
Investors say their long-term concerns include:
Long-term impact of growing political discord within the U.S. (77%)
Rising cost of healthcare (67%)
National debt (66%)
U.S.-China relations (64%)
During the past 12 months, 33% of survey respondents shifted assets from equities to cash or fixed income investments, and 32% plan to do the same in the next 12 months. Motivating factors cited by those investors included higher interest rates, advisor recommendations and feeling safer in cash or fixed income. This year, fewer respondents (54%) report they are preparing for a recession than in 2023 (65%), Janus Henderson Investors reported.
Among investors who own mutual funds or ETFs, 43% prefer an equal mix of active and passive funds in their portfolio, 26% favor active managers, 18% passive managers, 10% have no preference and 3% were unsure. Investors say the sectors that offer the best investment opportunities over the next few years include technology (73%), healthcare/biotech (62%) and real estate (38%).
However, investors also expressed concerns about technology, with 73% saying that AI greatly increases the risk of financial exploitation. Among those who use a financial advisor, 45% say their advisor has provided them with resources to help avoid financial fraud, while 29% would like their advisor to provide these resources, and the remaining 26% say they are not interested in these resources.
Among those who use a financial advisor or would consider hiring one in the next two years, 36% would object to their advisor using AI to make investment recommendations, and 44% would be upset if they learned their advisor used AI to respond to their texts or emails.
Among investors working with a financial advisor, 67% are very satisfied and 31% are somewhat satisfied with their relationship. The survey found that when advisors address emotional needs, client satisfaction improves. Factors associated with higher levels of satisfaction include:
Advisor provides peace of mind that I’m on track to reach my goals (cited by 79% of “very satisfied” clients)
Cares about me as a person, beyond just my financial situation (72%)
