What do investors want? Peace and security

By Lucy Dean

October 01 2017
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Peace of mind and a sense of security are top of investors’ lists when it comes to what they value most in a financial planner, a new report reveals.

A new report from asset manager Dimensional Fund Advisors reveals that out of 19,000 Australian, New Zealander, American, Canadian and European investors, 35 per cent consider a sense of security, or peace of mind, to be the most important factor in their relationships with their financial advisers.

This was followed by advisers’ knowledge of their clients’ financial situations (23 per cent), progress towards their clients’ goals (20 per cent) and investment returns (14 per cent).

“When investors work with an adviser who has a holistic understanding of their personal situation and can help them stay focused on their long-term goals, we believe they are better positioned to benefit from what the capital markets have to offer,” said the Dimensional co-CEO, Dave Butler.

He said that while returns matter, discipline and effective planning are just as crucial for investment success. Advisers play a role in this by setting the right expectations.

“In our view, peace of mind is what success is all about,” added Dimensional’s founder and executive chairman David Booth.

“Achieving returns in a way that enables people to relax just a little bit more is very important to us and also to investors.”

Retirement questions

The same survey revealed what financial information investors value most when thinking about retirement.

The top three responses in regards to retirement planning were the amount of money they would be able to spend each year (28 per cent), the likelihood of achieving their retirement savings and goals (28 per cent) and the total amount of money they would have for retirement (22 per cent).

When thinking about the most valuable financial information during retirement, 33 per cent of investors said information about the amount of money they could spend each year was crucial, followed by the average annual returns they could expect (24 per cent) and the total amount of money they would have in retirement (23 per cent).

The president of Dimensional International, Stephen Clark said: “We believe that future income needs is one of the most important components of effective retirement planning. The answer should influence how you invest.”

Retirement fears

Future retirees are most worried about “not having enough money to live comfortably in retirement” (37 per cent), followed by 31 per cent expressing a fear of a significant investment loss due to a market downturn, and outliving their money (13 per cent).

Mr Butler concluded: “Naturally, many investors have fears about what is likely their most important financial goal — saving for retirement. By helping clients understand what they can and cannot control, advisers can create a different experience to help ease their concerns.”

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