Bank of America's Merrill Lynch Wealth Management group was relaunched last fall as a more touchy-feely brokerage. Think cow, not bull.
They wanted to get to know their customers better and to listen more to their complex concerns, values and priorities. So Merrill surveyed 1,000 affluent families (with investible assets of $250,000 or more) and turned the results into a quarterly newsletter.
The Affluent Insights Quarterly — its fourth issue came out two weeks ago — shows that in some respects the affluent aren't so different from the rest of the population. More than half of the affluent surveyed admitted that they lie awake at night worrying about finances. And despite some signs of economic recovery in the first half of 2010, about 45% of them think they'll be retiring later than they had originally planned — a big increase from January's report, when 29% reported needing to delay retirement.
Merrill also found that younger investors are seriously spooked. Among the young affluent up to 34, about 56% said they have a lower tolerance for risk now than they did a year ago, compared with 49% of the 35- to 50-year-olds and 47% of the 51- to 64-year-olds.
Some might be proud of the youngsters and their sudden penchant for more-conservative investment strategies. After all, aren't they supposed to take their recent experiences with extreme market volatility, aggressively complex financial investments, front-running money managers — in fact, the entire financial crisis — and learn from it?
Apparently not. “A more conservative approach at a younger age can be detrimental,” said Sallie Krawcheck, president of global wealth and investment management at Bank of America, explaining that the group would miss out on market gains. “It is our job to help restore investor confidence so that risk aversion doesn't leave the next generation of investors inadequately prepared for the future.”
