CERTIFIED FINANCIAL PLANNER BOARD OF STANDARDS

Transcription

1 CERTIFIED FINANCIAL PLANNER BOARD OF STANDARDS AMERICANS VIEWS ON THE ECONOMY AND THE FINANCIAL SYSTEM PENN SCHOEN BERLAND 245 E. 92 ST NEW YORK, NY NEW YORK WASHINGTON DENVER SEATTLE LOS ANGELES SAN FRANCISCO LONDON HONG KONG `1

2 METHODOLOGY Penn Schoen Berland conducted 1,002 telephone interviews among a representative sample of the American population aged 18 and over. Margin of error for the entire sample is +/-3.1%, higher for subgroups. Fieldwork was completed from July 7 to July 8, Banner Definition All Americans over the age of 18 Adviser Americans over the age of 18 who have a financial adviser adviser Americans over the age of 18 who do not have a financial adviser <50K Americans over the age of 18 who live in households earning less than $50,000 per year in pre-tax income K Americans over the age of 18 who live in households earning between $50,000 and $100,000 per year in pre-tax income 100K+ Americans over the age of 18 who live in households earning in excess of $100,000 per year in pre-tax income Male American men over the age of 18 Female American women over the age of 18 EXECUTIVE SUMMARY Almost two years after the collapse of Lehman Brothers and the bailout of AIG, Americans are regaining confidence in the state of the national economy. Two-thirds of Americans (66 percent) believe that the American economy will hold steady or improve over the next six months, and five in six (83 percent) expect their own personal finances to do the same. But while cautious optimism is returning, the scars from the economic crisis remain. Nearly two-thirds of Americans (65 percent) say they are more concerned about finances than they were when the crisis began. Moreover, Americans feel the government has only taken the first steps in dealing with the financial market problems and their impact on American investors, and they believe that significantly more needs need to be done. As the recovery continues, Americans are keeping their optimism in check and preparing for a long and slow return to growth. When asked to describe the economy as an animal, they tend towards slow, lumbering animals like sloths, bears, turtles, and elephants; few choose the iconic symbol of confidence, the bull. In describing their own personal finances, while Americans no longer say they are alarmed or panicked, they also shy away from saying they are confident or secure ; instead, the number one choice is cautious reflecting the lessons learned from the past two years. When asked what financial and planning issues they are most concerned about, top choices include retirement and education rather than choosing stocks or managing cash. Today, more than a quarter of Americans (28 percent) use a financial planner or adviser, roughly the same number as did so before the crisis began, and a plurality of American feel they have become more important in the last two years. Those with financial planners are more likely to say they feel prepared for their financial futures than those without one. 2

3 DETAILED FINDINGS The vast majority of Americans feel that the U.S. economy will either improve or hold steady over the next six months, with just over one in four saying they think it will deteriorate in that period. What are your expectations for the overall U.S. economy over the next 6 months? All Adviser Total Improve / Neutral / Deteriorate 44//22/28 45/22/30 43/22/28 47/21/26 40/25/32 43/28/28 42/23/31 46/21/27 It will improve significantly It will improve somewhat It will neither improve nor deteriorate It will deteriorate somewhat It will deteriorate significantly Don't know Similarly, most Americans believe that their own personal finances will either hold steady or improve over the next six months, with just one in six predicting a decline in that time. It is clear that most Americans feel that the worst of the crisis has passed. What are your expectations for your personal finances over the next 6 months? All Adviser Total Improve / Neutral / Deteriorate 37/46/16 35/48/16 38/45/16 38/41/19 31/52/15 38/51/11 33/49/16 40/43/15 They will improve significantly They will improve somewhat They will neither improve nor deteriorate They will deteriorate somewhat They will deteriorate significantly Don't know

4 Nearly two-thirds of Americans say they are feeling financially prepared for the future, but that number falls to just half when looking at those living in households which earn less than $50,000 per year. Americans who have a financial adviser are 18 points more likely to say they feel financially prepared for the future than those without. Do you think you are financially prepared for the future? All Adviser Total prepared / unprepared 64/35 78/21 60/40 51/48 75/25 83/16 64/34 64/35 Very prepared Somewhat prepared t very prepared t prepared at all Don't know When asked how they would describe the state of their personal finances, most Americans shy away from words expressing pessimism, anxiety, alarm, and panic; however this does not mean they are feeling secure or confident. The most selected words are those which strike a middle ground, expressing caution and calm. Which of these words or emotions best describes how you feel about your personal finances today? Multiple Responses Permitted All Adviser Cautious Calm Hopeful Concerned Confident Secure Anxious Pessimistic Alarmed Confused Panicked Don't know - ne of the above

5 When asked about which financial planning issues cause them most concern, most Americans are focusing on long-term expenses such as retirement, education, and saving, rather than on shorterterm issues. What are the most important financial planning issues you are concerned about at this time? Multiple Responses Permitted All Adviser Retirement goals and planning Education funding Savings goals and planning Cash and debt management Balancing short- and long-term goals and planning Investment goals and planning Insurance planning Multi-generational and family planning Tax planning Estate planning Employee benefits planning Charitable giving and philanthropy goals and planning Advice on a broad range of financial matters Stock option strategies Change in marital status Other motivating factors Don't know - ne of the above

6 Qualitatively, Americans are not to the point of feeling bullish on the economy. Instead, when asked to describe the economy as an animal, most gravitate towards large and lumbering animals such as sloths, bears, and turtles. If the economy today were an animal, which animal do you think it would be? Open End The financial crisis has left its impact on the American psyche, with a strong majority of Americans saying they are more concerned about finances than they were two years ago. Have your financial concerns changed since the start of the current financial crisis nearly two years ago? All Adviser Total more concerned / no change / less concerned 65/28/7 68/24/6 62/30/7 66/28/6 66/26/8 63/28/8 61/32/8 68/25/5 I am much more concerned I am somewhat more concerned change I am somewhat less concerned I am much less concerned Don't know

7 Today, 28 percent of Americans say they have a financial adviser, which is almost exactly the same as said they had one two years ago. Of those who have an adviser today, 81 percent also had an adviser two years ago. Did you use a financial planner or adviser before the start of the current financial crisis nearly two years ago? All Adviser Yes Don't know Are you using a financial planner or adviser today? All <50K K 100K+ Male Female Yes Don't know Of those who have started working with an adviser in the last two years, the plurality have done so for reasons besides the economic crisis. Which of the following statements most accurately describes your decision to start using a financial planner? Among those who did not have a financial adviser two years ago but who have one now All <50K K 100K+ Male Female I felt like I needed more financial guidance during these difficult times for investors My decision was unrelated to the financial crisis; it was just time to get some financial advice Neither of the above Don't know

8 By a three-to-one margin, Americans believe that financial planners have become more, rather than less important in the last two years. Do you think financial planners have become more or less important in the last two years since the start of the financial crisis, or has there been no change in how important they are? All Adviser Financial planners have become more important Financial planners have become less important There has been no change in how important financial planners are Don't know Just 14 percent of Americans think that Congress and regulators have done all or much of what needs to be done to deal with the financial crisis. This number is higher among those who have a higher level of income. Do you think Congress and regulators have done enough to deal with the financial market problems and their impact on American investors? All Adviser Total All or much / little or none 14/80 16/76 13/81 11/80 15/82 22/74 16/78 11/81 All of what needed to be done has taken place Much of what needed to be done has taken place Little of what needed to be done has taken place ne of what needed to be done has taken place Don't know