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Preparing affluent investors for retirement

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While a majority of affluent investors report feeling good about their overall financial health and their ability to manage their finances, a significant percentage (39%) of wealthy investors say they don’t have confidence in their own ability to manage their investments during periods of market turbulence, according to a new Wells Fargo Affluent Investor survey.

Based on an online survey of 1,983 affluent investors between ages 30 and 75 who have $250,000 or more in investable assets excluding retirement and property assets conducted by Harris Poll, the Wells Fargo found that a great majority of wealthy investors feel confident in their retirement savings.

The Wells Fargo study revealed that in general, non-retired affluent investors feel like they’re on the right financial path to retirement. In fact, 92 percent of this group report feeling confident they’ll have enough money to support the lifestyle they want in their retirement years. Nearly three-fourths (74%) of non-retired affluent investors say they are currently able to save enough to meet their retirement goals.

But despite their overall confidence in their ability to meet retirement goals, affluent investors have some regrets when they look back at how they handled their finances in the past. The most common financial missteps they regret when looking back at the past 10 years is not having made better investments, not saving more and spending less, and not having enjoyed their money more.

More than half of affluent investors (57%) feel it’s important to leave an inheritance. Nearly three-fourths (71%) of this group have proactively taken the necessary steps to transfer their wealth to beneficiaries. Just more than one in five respondents (21%) reported that they will not have the ability to leave an inheritance at all because they expect to need all their assets to live on during their retirement years. And while a quarter of affluent investors report being uncomfortable talking to their family about their estate plan, another quarter said they don’t fully understand the complexity of transferring their assets to the next generation after their demise.

“People who have worked hard to become affluent said it’s important to them to transfer their wealth to their heirs, so it’s essential that their investment plan include preparations to do that in an orderly way,” said Joe Nadreau, head of Innovation and Strategy at Wells Fargo Advisors in statement.

Although investment tools and technologies play an important role in helping investors monitor and manage investments, the Wells Fargo survey found that affluent investors generally wouldn’t feel comfortable handing off their money management to an automated investment advisory service, or robo-advisor. This group would, however, like to see their financial advisor leverage automated investment tools to determine an optimal investment mix. About two-thirds (66%) of affluent investors said they’d be interested in using technology to manage investments – but only with the help of an actual human.

“While investors recognize that technological tools are important and they’re willing to embrace them, an advisor’s ability to relate to a client on a human level adds a dimension that online tools alone can’t match,” Nadreau said.