US Investors Play It Safe, Particularly Those Aged Under 40 - Cerulli

Tom Burroughes

3 July 2017

A research of US investors by research and consulting firm Cerulli Associates finds that respondents are far more concerned about reducing risk and protecting their wealth than growing money aggressively. Confounding stereotypes of age and risk, the survey showed that persons aged under 40 are more conservative.

The report found that 77 per cent of those who responded said they prefer a safety-first option, the findings show. The report is called US Retail Investor Products and Platforms 2017: Retooling for the Modern Investor.

“Investors are far more concerned with whether they will be okay financially than whether their managers provided a few basis points of alpha. Of course, the two are related, but in an extended bull market run, the industry has largely focused product development and implementation more on growth than protection,” Scott Smith, director at Cerulli, said.

"After discussing investors' portfolios with platform providers and advisors, there is a consistent fear of looming client defections resulting from performance that lags a benchmark, or index. But actual instances of this situation remain far more the outliers than regular occurrences,” Smith continued.

“Futher confounding financial professionals is that the preference for portfolio protection is cited by more than 80% of investors under age 40, an age bracket where most providers assume investors are most willing and able to accept portfolio risk," Smith said.