BOSTON--(BUSINESS WIRE)--MFS Investment Management® (MFS®) announced key preliminary findings from its Investing Sentiment Survey, the first of three surveys America's oldest mutual fund company plans to report on this year. In this first wave, MFS will address both investors' and financial advisors' attitudes toward and perceptions of investing.
MFS has identified a number of major disconnects between advisors and their clients, especially with Generation X/Y:
- 20% of advisors think a major drop in the stock market is investors' top financial concern, but only 5% of investors say it is.
- 72% of advisors think US equities are an excellent or very good place to invest; only 35% of investors agree.
- 60% of advisors think international stocks are an excellent or very good place to invest; only 22% of investors agree.
- 75% of advisors perceive that investors have become much more or somewhat more risk tolerant over the past 12 months; however, only 15% of investors report an increase in their willingness to take on more risk.
- 16% of advisors perceive that investors have become more risk averse in comparison to 12 months ago; in fact, 26% of investors report they are less willing to take on risk to achieve higher returns.
- 84% of advisors think Gen X/Y investors have a primary investing goal of growing assets; only 39% of Gen X/Y investors report this as a primary goal.
- 9% of advisors think Gen X/Y have a primary goal of protecting principal; 22% of GenX/Y have this as a primary goal.
- Advisors think Gen X/Y have 50% of their investments in US equities and 9% in cash; in fact, Gen X/Y report significantly less equity exposure, 34%, and 3 times greater cash exposure, 30%.
- Advisors are underestimating investors' optimism about the U.S. economy over the next 5 years, with 35% of advisors reporting that investors are optimistic, while 47% of investors reported being optimistic.
"While these disconnects show a need for advisors to reconsider how they view their clients, the survey showed that advisors are underestimating investors' optimism about the future of the U.S. economy," said William Finnegan, senior managing director of retail marketing for MFS. "With Gen X/Y maturing and Boomers approaching critical decision points for retirement, we believe advisors should reassess how they communicate with clients, and what the lasting impact of 2008's financial crisis has had on investors' risk tolerance."
MFS plans to report on additional findings from the survey over the next several weeks, focusing on the investing attitudes of Gen X/Y and Baby Boomers as well as mass affluent and millionaires.
Important Risk Considerations
Stock markets and investments in individual stocks are volatile and can decline significantly in response to issuer, market, economic, political, regulatory, geopolitical, and other conditions. Investments in bonds may decline in value as the result of increases in interest rates, declines in the credit quality of the issuer, borrower, counterparty or other conditions. Certain types of bonds can be more sensitive to these factors and therefore more volatile.
About the survey
MFS, through Research Collaborative, an independent research firm, sponsored an online survey from February 7-15, 2011, of 596 individual investors with $100k+ in household investable assets and 612 licensed financial advisors (either FINRA or SEC) who have been licensed for at least three years with at least $500,000 or more in annual mutual fund sales. All investor respondents make or share in making financial decisions for their households. MFS was not identified as the sponsor of the survey. Gen X/Y refers to those respondents under age 46. Boomers refer to those 46 to 64 years old. Seniors or older generations refer to those 65 or older.
About MFS Investment Management
MFS is a premier global money management firm with investment offices in Boston, London, Mexico City, Singapore, Sydney, and Tokyo. The firm’s history dates back to March 21, 1924, and the establishment of the first U.S. “open-end” mutual fund. MFS manages $231.2 billion in assets on behalf of individual and institutional investors worldwide, as of February 28, 2011. Please visit mfs.com for more information.
MFS Investment Management
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