RADNOR, Pa.--(BUSINESS WIRE)--
Financial advisors see anxiety adversely impacting clients' financial
planning and investment decisions, according to survey results released
today by Hartford
Funds. From missing investment opportunities to prioritizing low
risk over the potential for higher returns, Americans' uncertainty and
anxiety are driving their financial decisions. Roughly 130 advisors were
surveyed regarding client investment behaviors against the backdrop of
today's economic environment.
"While it's no surprise that consumers are anxious about the economy,
advisors are facing the challenge of not only managing clients'
investments, but also managing the emotions and fears that influence
their decisions," said John Diehl, Senior Vice President at Hartford
Funds. "While there are a number of factors to consider, the survey
findings underscore the need for both advisors and clients to recognize
and evolve certain behaviors in order to effectively pursue their
Key findings from the survey include:
- Anxiety is adversely impacting client investment decisions:
Most advisors (57 percent) believe clients have allowed their anxiety to
adversely impact their investment decisions. This behavior is one of the
top two concerns shared by advisors today. Market volatility was the
most-cited issue that is keeping advisors up at night, followed closely
by client anxiety about saving and investing.
- Consumers place higher value on investment certainty than returns:
More than three-quarters (76 percent) of advisors noted that their
clients are prioritizing investment certainty over the potential for
higher returns. Despite this sentiment, 37 percent of advisors expect
their clients' risk tolerance to increase over the next 12 months, while
only 17 percent expect clients to become more risk averse. Nearly half
(46 percent) of advisors surveyed expect risk tolerance to remain the
Interestingly, this trend of shifting risk aversion follows advisors'
own patterns. Thirty-seven percent of advisors reported their personal
investment profile has become less conservative over the past 12 months.
Only ten percent have become more conservative, with the remaining 53
percent keeping a steadfast risk profile.
- Advisors are seeking alternatives to fixed income amid rising
Two-thirds (66 percent) of advisors surveyed indicated that the
potential of rising interest rates has led them away from recommending
fixed-income vehicles to their clients. The remaining 34 percent of
advisors, who indicated they were not moving their clients out of fixed
income, saw various benefits to sticking with their fixed-income
strategy. Forty-one percent of those respondents attribute their
decision to still seeing opportunities in the bond market. Thirty-two
percent believe that no other vehicles provide the same income and
security; and 23 percent remain confident in the long-term performance
potential of fixed-income products. Only four percent indicated a lack
of client confidence in the equity market as their motivation for their
commitment to fixed income.
- Equity Value Funds and corporate bond products provide greater
clarity for clients:
When asked about client anxiety as it relates to various investment
vehicles, advisors overwhelmingly cited emerging market funds as
anxiety-inducers. Ninety percent of advisors polled indicated that these
products caused the greatest anxiety among clients. Sixty-five percent
of advisors said international bond funds are also a cause for client
On the other hand, seventy-three percent of respondents indicated that
clients were least apprehensive about equity value fund products and 68
percent cited corporate bond fund products as the least concerning.
"Anxiety creates a tendency among clients to focus on negative
information and, in some cases, seek it out to support their fears and
concerns," said Vernon Meyer, Chief Investment Officer at Hartford
Funds. "We arm advisors with the tools they need to educate clients
about market realities and the changing economic environment to temper
overall investing anxiety. Illustrating how past cycles or events have
generally resulted positively can help encourage long-term thinking and
make the case for a diversified and balanced portfolio."
The survey of 128 financial advisors was fielded in-person between
September 18, 2013 and November 5, 2013. It was executed by Hartford
About Hartford Funds
Founded in 1996, Hartford Funds is a leading provider of mutual funds
and 529 college savings plans. The Company offers a broad range of
actively managed strategies designed to provide solutions for a variety
of investment needs. Hartford Funds has total assets under management of
$66.8 billion as of September 30, 2013 (excluding assets used in certain
annuity products). Hartford Funds are sub-advised by Wellington
Management, a leading investment advisor. For more information about the
fund family, visit www.hartfordfunds.com.
All investments are subject to risk, including the possible loss of
You should carefully consider investment objectives, risks, charges,
and expenses of Hartford Funds before investing. This and other
information can be found in the Fund's prospectus or summary prospectus,
which can be obtained from your investment representative or by calling
Please read them carefully before you invest or send money.
Hartford Funds are underwritten and distributed by Hartford Funds
Hartford Funds is a subsidiary of The Hartford Financial Services Group
"The Hartford" is The Hartford Financial Services Group Inc. and its
Wellington Management Company, LLP is a SEC-registered investment
adviser and an independent and unaffiliated sub-adviser to Hartford
Some of the statements in this release may be considered
forward-looking statements as defined in the Private Securities
Litigation Reform Act of 1995. We caution investors that these
forward-looking statements are not guarantees of future performance,
and actual results may differ materially. Investors should consider the
important risks and uncertainties that may cause actual results to
differ. These important risks and uncertainties include those discussed
in The Hartford's Quarterly Reports on Form 10-Q, our 2012 Annual
Report on Form 10-K and the other filings The Hartford makes with the
Securities and Exchange Commission. We assume no obligation to update
this release, which speaks as of the date issued.
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Source: Hartford Funds