Northwestern Mutual executives are worried that U.S. consumers may have moved away from thinking that normal prices are stable prices.
They see signs that consumers now see inflation as normal.
"Half of Americans believe inflation will be higher a year from now," John Roberts, the Milwaukee-based life and annuity issuer's chief field officer, said at a recent press briefing the company held in New York to go over results from the company's latest survey.
The results were based on responses from 4,626 U.S. adults 18 and older. The survey was conducted from Jan. 2 through Jan. 19, before Donald Trump was inaugurated as president.
Most of the participants told the survey team that rising prices are a problem.
Only 11% of the participants with $1 million or more in investable assets said they felt as if they were keeping up with inflation, Roberts said.
"Inflation is not only sticky," Roberts said. "It can be self-fulfilling, and self-perpetuating."
Benjamin Feldman, a New York-area financial planner affiliated with Northwestern Mutual and president of the company's Financial Representatives Association, said inflation is coming up in all conversations with clients.
One response is to make sure that clients are even more broadly diversified than usual, with holdings in assets such as commodities that might do well in inflationary times, Feldman said.
Another response is to think harder about arrangements that might lock clients' money up for extended periods, Feldman said.
For a client to lock up money, "you'll have to really be getting paid for your time," he said.
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