January 23, 2012

Affluent Investors Spooked by Market Volatility: Merrill Survey

Merrill Survey finds those with assets of $250,000 and up say volatility and other factors inhibit their savings and investment

The preliminary results of the most recent Merrill Lynch Affluent Insights Survey released Monday show that stock market volatility and broader trends are discouraging wealthy investors from saving and investing more in 2012.

When asked what would encourage them to save and invest more this year for their retirement, affluent investors said: a less volatile stock market (38%), an improved job market (37%), more stability in the global economy (32%), a change in U.S. political leadership (31%); better incentives from the government (31%); and greater incentives from employers (22%).

The survey of about 1,000 individuals with $250,000 or more in investable assets is conducted every six months, and the full results should be released in February.

“As the nation emerges from the financial crisis, policymakers bear a disproportionate role in helping to resolve several issues and, as a result, could have a significant impact on volatility in the capital markets,” said Lisa Shalett, chief investment officer for Merrill Lynch Global Wealth Management (which includes some 18,000 financial advisors), in a press release.

“Weary from a decade of lower equity returns and ongoing concerns about capital preservation, investors are rightfully concerned about how political actions in the U.S. and around the world in 2012 may directly impact their portfolio as well as their current and future incomes,” Shallett added.

Like investors at lower socioeconomic levels, many affluent investors are trying to pay down debt while saving for retirement. One-third (32%) paid down a portion of their overall debt in 2011, the latest survey results indicate, while 36% expect their level of debt to decrease in 2012.

In terms of the broader issues that are of concern to affluent investors, nearly 80% are concerned with the rising cost of health care (79%), the national budget deficit (76%), unemployment (73%), and the future of Social Security benefits.

Six months ago, high health-care costs topped the list of financial concerns for most affluent investors, 70% in June 2011 vs. 64% in January, while retirement income was also on their minds, 65% vs. 57% in January 2011.

Reprints Discuss this story
This is where the comments go.