No surprise here, 401k savers are worried about market volatility and want advice for protecting their retirement nest eggs during periods of turmoil.
Four out of five people would like to learn about an investment “option that offers principal protection and the potential for growth,” according to a joint report by AXA US and the Insured Retirement Institute.
In a study of 1,000 individuals and 300 financial professionals, more than half acknowledge the need to take investment risks in order to achieve their financial goals and negate inflation.
However, 83 percent fear losing principal and 73 percent are unsure their savings will last throughout retirement. Over seven in 10 would rather invest conservatively, even if it means earning lower returns, in order to avoid greater risk.
While many retirement savers (80 percent) say they have discussed risk tolerance with a financial advisor or other industry expert, what they really want to talk about is guaranteed lifetime income, such as structured and fixed annuities, the report contends. Three in 10 respondents think they would be more comfortable investing in such products, but half of those surveyed have yet to be advised on the topic.
“This research underscores financial professionals’ pivotal role in helping retirement savers to gain comfort around their ability to withstand market volatility and the potential role of high quality annuity products in helping to achieve financial security,” Catherine Weatherford, president and CEO, Insured Retirement Institute, said in a statement. “In return, financial professionals will be rewarded with higher client satisfaction.”
Much higher client satisfaction, it turns out. Data show 56 percent of those surveyed are highly pleased with whomever they consult about finances when that professional touches on lifetime income. In contrast, only 34 percent of clients report high approval of their financial professional if he or she skips over the subject. Furthermore, 60 percent say they aren’t okay with the way in which their assets are currently allocated to stocks.