State Street Global Advisors, the asset management business of State Street Corporation, announced the findings of its Inflation Impact Survey: Advisor Edition.
Preliminary findings show that among investors currently working with a financial advisor, the vast majority have said that the guidance given by their advisors is much more valuable now and has helped them remain confident during this period of rising inflation and market volatility.
The release of this data follows the initial findings of the Inflation Impact Survey, which showed that inflation-induced stress directly affects investors' behavior with regard to short-term budgeting and their willingness to commit to long-term financial goals. The survey also analyzed the value of financial advisors during this period of volatility and uncertainty.
Let's Talk Inflation
Among those working with a financial advisor, around 75% have had a discussion about inflation. These conversations cover how inflation will impact their short- and long-term investment goals. 90% of investors say that they value their advisor's guidance more in these uncertain times. Around 86% believe their advisor has helped them remain confident even in the current situation.
Is It Better to Work With Investors?
Approximately half of investors concur that working with a financial advisor is better when the market is volatile.
The survey examined the generational differences in attitudes towards financial advisors and found that Gen X was the least likely to work with an advisor in the current market situation. Only 42% agreed it is better to consult a financial advisor than 63% of Millennials.
The State Street Global Advisors Benchmark Survey said that the top two reasons that Gen X is less likely to want to work with an advisor are 1) they want to have full control over their investment decisions and 2) they don't trust that financial advisors have their best interests in mind.
Reports showed that Gen X is far more concerned with inflation. 88% of Gen X'ers say that inflation is their top concern. Another point of concern for Gen X is whether or not they can afford retirement.
Can Investors Tolerate Market Volatility
Studies and comparisons of prior years' comfort levels with regard to market volatility show that the market's ups and downs are making investors increasingly uneasy. Only 31% of them agree with the statement, “I am comfortable with the highs and lows of the financial markets.”
49% of Millennials say they are comfortable with the market's volatility, whereas only 22% of Gen X'ers and 24% of Boomers say they are comfortable.
Should You Invest More in the Market Right Now?
Around one-third of investors agree that now is a good time to invest more in the market. 36% neither agree nor disagree, and 25% think now is not a good time.
Millennials are significantly more likely to think it's a good time to invest compared to Gen X and Boomers.
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