Non-retiree investors are bullish on investment technology and financial advice, but - in line with other recent studies - are worried about having enough money in retirement.

Non-retiree investors are bullish on investment technology and financial advice, but - in line with other recent research - are worried about having enough in retirement, according to the second quarter Wells Fargo/Gallup Investor and Retirement Optimism Index.

The index slipped eight points in Q2 to +29 from +37 in February, driven by a decline in optimism among retired investors, whose view of inflation and economic growth deteriorated during the quarter, Wells Fargo said.

The optimism of non-retirees remained essentially unchanged at +31, versus +35 in February, according to the quarterly survey of 1,036 US investors. Of total respondents, 61 per cent had reported annual income of less than $90,000 and 39 per cent of $90,000 or more.

Retirement concerns

About half of the non-retired investors in the survey (47 per cent) were either “extremely” or “somewhat” worried that they have not saved enough to retire; around a third (29 per cent) were a “little worried” while 24 per cent were “not worried at all.”

Similarly, 46 per cent of all investors – retired and non-retired – were worried they won’t have enough money to last throughout their retirement, including 19 per cent who were “extremely worried.” A fifth were “a little worried” and 29 per cent were “not worried.”

Merrill Lynch recently predicted that it will become increasingly common for people – regardless of their net worth - to seek work during this stage of their lives as, already, half of current retirees have worked or are planning to work during their retirement years.

However, Bill Hunter, director of personal retirement strategy and solutions for Bank of America Merrill Lynch, previously told Family Wealth Report that, according to the firm's research, 85 per cent of pre-retirees have not discussed their retirement work plans with their financial advisor.

Advice versus individual knowledge

Of the 80 per cent who reported owning individual stocks or mutual funds, 71 per cent prefer consulting with someone who can give them expert or professional advice, compared to 27 per cent who said they feel confident about investing in the market on their own.

Overall, around a third of investors (32 per cent) claimed to have sought more financial advice in the last two to three years, with nearly 40 per cent indicating they would increase the advice they seek in the next two to three years.

Unsurprisingly, the survey found that investors overwhelmingly seek advice during major life changes, the top three events being: retirement (71 per cent); divorce (64 per cent); and death of a close family member (52 per cent).

However, only 35 per cent of investors said they would seek financial advice upon getting married, followed by 34 per cent seeking advice for changing jobs and 32 per cent when "everything is going well."

Technology

Somewhat predictably, it emerged that non-retirees are much more confident about the role of technology in investing. Of the retired investors surveyed, for example, over half (53 per cent) rely more heavily on a dedicated personal financial advisor than on technology, compared to 11 per cent among non-retired investors.

Meanwhile, 66 per cent of non-retirees (compared with just 34 per cent of retirees) said they were “very” or “somewhat” comfortable using technology in conjunction with their investing or finances.

The poll also found that high-asset investors – those with $100,000 or more – were more likely to rely on advisors and technology, although they still relied more heavily on a dedicated personal financial advisor than on technology, at 53 per cent versus 23 per cent.

“Technology is dramatically transforming the way investors – and their advisors – approach financial planning,” said Joe Nadreau, head of innovation and strategy at Wells Fargo Advisors.

“That the fastest-growing group of investors – non-retirees – is showing more signs of openness to technology is a strong indicator for the future of our industry,” Nadreau said.