The number of American consumers who say they feel experienced as investors, secure in their financial futures and comfortable taking investing risks is trending upward, according to a report released Tuesday by Hearts & Wallets, an independent data and benchmarking firm.
For its report, Hearts & Wallets researchers polled 5,981 U.S. households drawn from the Investor Quantitative Database between July 17 to Aug. 9.
Positive Financial Outlook
Consumers who purported to feel secure about their financial futures grew by 4 percentage points year over year to 51% of households, and by 11 points since 2010, continuing a long-term increase since IQ Database tracking began 15 years ago.
The number of customers who said they feel experienced with investing is at the highest point since tracking began. According to the report, these consumers are more likely to make investing decisions on their own and to use paid investment professionals.
Investing risk tolerance is also at the highest level since IQ Database tracking began, with 38% of households reporting feeling very or somewhat comfortable with accepting volatility in the hope of getting a higher return, up 20 points since 2012.
The polling showed that customers of E-Trade, Vanguard and Robinhood are most risk tolerant, with nearly two-thirds at each firm saying they are very or somewhat comfortable.
Principal Financial had the most diverse customer base in terms of risk tolerance, with 23% of respondents being very comfortable and 20% being very uncomfortable.
Among asset managers, Fidelity, Vanguard and BlackRock/iShares had the highest household penetration of the most risk-tolerant consumers, while American Funds (Capital Group) performed well with more risk-averse households.
“Increasing investor confidence influences buying patterns,” Laura Varas, Hearts & Wallets’ founder and CEO, said in a statement. “More confident consumers want to make investing decisions on their own and use financial advisors. Confidence and risk tolerance are important tools to engage today’s buyers.”
Advice, Money and Sustainability
Thirty-two percent of households in the survey agreed that they “see value in paying for professional financial advice, whether or not I use a financial advisor today,” while 20% disagreed.
In addition, 30% of households agreed that they “enjoy thinking about money,” while 27% disagreed. In 2011, only 18% agreed, and 32% disagreed.
A rising portion of households reported that sustainability influences their investment decisions: 26%, up from 21% in 2022. Fewer households said they expect to spend most of their money themselves, rather than pass it on to heirs or charities.
And as an indication of the value that Americans place on strong manufacturers, 33% of households agreed that “insurance credit ratings are important to me,” up from 25% in 2010.
“As more consumers enjoy thinking about money, they are setting more goals for themselves and working toward achieving them,” Beth Krettecos, subject matter expert at Hearts & Wallets, said in the statement. “This trend is changing buying patterns in favor of firms that understand and build for consumer needs.”
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.