Amid Uncertainty, Investors With Financial Advisers Are More Confident About Their Investment Strategy, Study Finds
November 12 2020 - 9:01AM
Business Wire
In turn, those with greater confidence are more likely to engage
in economy-boosting public consumption
Amid pandemic-fueled economic uncertainty, more than one-third
(35%) of investors with financial advisers are “very
confident” in their investment strategy, compared to those without
advisers who are “very confident” (15%). Those with high confidence
are in turn more likely to have engaged in consumer behaviors
critical to economic recovery — such as reserving a hotel, renting
a car or booking a flight. The new findings correlating engagement
of a financial adviser with confidence and public consumption come
from the Franklin Templeton-Gallup Economics of Recovery
Study, an ongoing study of Americans’ propensity and readiness
to resume pre-COVID-19 economic behaviors, based on surveys
completed by more than 5,000 U.S. adults between Oct. 1 and Oct.
9.
Financial Advisers Are Associated With Greater Confidence in
Investment Strategy
The survey found that nearly half of investors (48%) say they
are working with a financial adviser. Those who are not are twice
as likely to say they are “not too confident” or “not confident at
all” in their investment strategy as those who are (30% versus
15%).
Generally, investors with higher incomes are more likely to be
confident in their investment strategy. However, the impact of a
financial adviser, and the perception of greater economic
confidence, is consistent across income groups. Among investors
with annual household incomes below $120,000, as well as among
those making above that threshold, respondents with advisers are
more than twice as likely to express the highest levels of
confidence.
Financial Advisers Associated With
Greater Confidence Among Both Lower-Income and Higher-Income
Investors
Stock investors overall
Investors with a financial
adviser
Investors with no financial
adviser
%
%
%
Household income less than
$120K
Very confident
23
33
14
Somewhat confident
52
51
54
Not too confident
22
14
27
Not confident at all
4
2
5
Household income $120K or more
Very confident
32
42
18
Somewhat confident
53
46
61
Not too confident
13
10
16
Not confident at all
3
1
4
Franklin Templeton-Gallup Economics of
Recovery Study, Oct. 1-9, 2020
Investors with financial advisers are also more likely to have a
positive view of the stock market’s performance. Thirty-five
percent of investors with an adviser — versus 22% of those without
one — say the market is “much higher” or “somewhat higher” today
than it was before the pandemic began.
Confidence in Investment Strategy Is Key to Economic Activity
and Recovery
Confidence in one’s investment strategy ripples far beyond the
realm of investment activity. Among those surveyed, respondents
with the highest levels of confidence in their investment strategy
are more likely to have engaged in consumer activities in
industries especially hard hit by the pandemic, including dining
indoors at a restaurant in the past 24 hours, reserving a hotel,
renting a car or booking a flight for use within 30 days. These
differences are present among both lower-income and higher-income
investors.
Investors Who Are “Very Confident” They Have the Best Possible
Investment Strategy Are More Likely to Have Engaged in Key Consumer
Behaviors
Household income less than
$120K
Household income $120K or
more
%
%
%
%
“Very confident” investors
All other investors
“Very confident” investors
All other investors
Booked a flight that leaves within 30
days
33
13
39
13
Reserved a hotel for use within 30
days
36
12
37
15
Rented a car for use within 30 days
29
8
33
8
Dined indoors at a restaurant in the past
24 hours
32
15
46
14
Franklin Templeton-Gallup Economics of
Recovery Study, Oct. 1-9, 2020
“Financial advisers have always helped educate investors about
their investment options, but this research shows that their steady
hand is also correlated with a stronger sense of control and
confidence by investors in their financial future, which translates
into broader engagement in consumer activity that the economy needs
now,” said Sonal Desai, chief investment officer, Franklin
Templeton Fixed Income. “By laying the groundwork for investor
confidence, advisers’ work is enabling the type of consumer
confidence needed to stimulate further economic recovery.”
“Identifying the factors associated with increased public
consumption confidence will be critical to understanding paths to
economic recovery,” said Jonathan Rothwell, Gallup principal
economist. “Along with things like confidence in one’s ability to
protect oneself from COVID-19, investment confidence is an attitude
that will open up consumer spending that can buoy some of the U.S.
economy’s hardest-hit industries.”
To learn more about the analysis and study methodology, click
here.
About Franklin Templeton
Franklin Resources, Inc. [NYSE:BEN] is a global investment
management organization with subsidiaries operating as Franklin
Templeton and serving clients in over 165 countries. Franklin
Templeton’s mission is to help clients achieve better outcomes
through investment management expertise, wealth management and
technology solutions. Through its specialist investment managers,
the company brings extensive capabilities in equity, fixed income,
multi-asset solutions and alternatives. With offices in more than
30 countries and approximately 1,300 investment professionals, the
California-based company has over 70 years of investment experience
and approximately $1.4 trillion in assets under management as of
Oct. 31, 2020. For more information, please visit
franklintempleton.com.
About Gallup
Gallup delivers analytics and advice to help leaders and
organizations solve their most pressing problems. Combining more
than 80 years of experience with its global reach, Gallup knows
more about the attitudes and behaviors of employees, customers,
students and citizens than any other organization in the world.
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version on businesswire.com: https://www.businesswire.com/news/home/20201112005661/en/
Gallup Justin McCarthy Justin_McCarthy@gallup.com
202-715-3217
Franklin Templeton Stacey Coleman
stacey.coleman@franklintempleton.com 650-525-7458
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