Fiscal Fitness: How Affluents Flex Their Financial Muscle

 

More than 70% of U.S. household net worth and a whopping 87% of corporate stock equities and mutual funds are held by Affluent Americans (those earning $125,000+ annually). So, how they manage their money and their thoughts about the future are of paramount importance to the financial industry and aligned businesses.

Listen in as our experts explore a treasure trove of insights derived from research conducted in January 2022 on the most powerful purchasing cohort in the country. Among the insights you will hear are:

• Expected changes in financial strategies for 2022
• Areas of concern that could significantly impact consumer finances
• Where Affluents plan to shift investments
• Sources of information Affluents use when making financial decisions
• Important features Affluents seek when deciding on financial advisors and companies
• Role of blockchain cryptocurrencies and expectations for the coming year

The Ipsos Affluent Survey has been tracking the financial power of Affluents, along with their media and consumer behavior, for more than 45 years. As a result, we are able to offer an unparalleled understanding of how Affluent Americans think and act. 

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AI-generated audio transcript is offered below. Apologies in advance for inconsistencies that have been included.

0:04

Thank you for joining us for today's Ipsos webinar exploring Affluents' Financial Outlook for the Year Ahead.

0:12

Today's presentation is being given by Tony Incalcatera and Jesse Peretz and you can read more about them on the slide in front of you.

0:22

Throughout today's session, you will remain in listen only mode, however, throughout the webinar, you may submit questions online using the Q&A feature. Time permitting. We'll answer questions at the end of today's session, however, if time runs short, then your question will be answered by e-mail.

0:43

I also encourage you to check out the handouts we've uploaded into the webinar console.

0:49

Today's webinar is also being recorded and will be directly e-mailed to you.

0:55

So now, without further ado, it's my pleasure to introduce today's first speaker, Tony Incalcatera, senior vice president with if so since audience measurement team. Tony, you have the floor.

1:10

Thank you, Elen. It's great to see everybody.

1:13

We're going to turn off my camera so that we can focus on the slides.

1:20

Any case, what we wanted to to start was to sort of give everybody a perspective of what's going on.

1:27

Just looking at yesterday, we can see that the Dow has lost over 8% of its value since just the start of the year.

1:39

And, you know, quite honestly, with that, the likelihood of a full Russian invasion into Ukraine, and surely we will see further damage to the financial markets.

1:52

Despite that, you know, we can't say with a great degree of certainty that that affluent Americans generally benefit from financial insulation that they've built up over the years.

2:07

So, you know, although there were 401 K's in their investment portfolios are going to shrink some water likely tree in the coming months.

2:16

Really the top 20% of the population is still going to likely control three quarters of the US household net worth.

2:25

There are 55% more likely than the non affluent population to say that they are financially secure.

2:33

And they're 45% more likely to say that they still have a little money left over for indulgences.

2:39

So, you know, with that in mind, we're thrilled to help you understand the dynamics of affluent finances and how will they make their decisions.

2:51

So that today we will start looking at them.

2:56

Then the insights that we're going to provide today are primarily derived from two sources: are ongoing IPs cells Affluence study in the USA, along with an in-depth study that we conducted or that we conduct every January as part of our quarterly barometers series.

3:19

Now the US Affluence and is part of Ipsos is 49 country global effort.

3:25

That provides clients really with a total understanding of affluent consumers who they are, what they buy, and use, how they fake it.

3:36

And ultimately, it's all about how to reach them effectively and speak to them in the most pervasive way.

3:45

So, we'll start today by giving you a picture of what affluent investors look like, how they approach their finances.

3:54

From there, we will talk about the financial outlook for the coming year, including that you know a little bit about how applicable are going to change their investment approaches, or how likely they are to change them.

4:07

My colleague Jesseie Parrots, is going to guide you through an understanding of how Affluents think about their finances and the things that might trigger changes in their approach.

4:20

I'll follow up with an examination, the relationship that Apple in Tap, with financial professionals and institutions.

4:28

And then Jessee is going to come back, and he's going to provide us with a look at the role that Blockchain technology has in affluent portfolios.

4:39

And finally, you know, in the end, we're going to do our best to summarize all of this into, you know, some concise salient soundbites for him.

4:48

So let's start really by painting a picture of who these affluents are.

4:54

There are roughly 30 million affluent households in the U S these households that we classify as affluent, meaning that they earn a minimum of $125,000.

5:07

The median average app would household has a net worth of one point one million dollars, and almost one in four of those households has a net worth of two point five million dollars or more and about one in ten.

5:25

Their worth is in excess of $5 million.

5:28

Now, on average affluent households excuse me and have well over half a million dollars in investable assets.

5:39

And as a result, they're really critical to financial institutions. You know, they're recline.

5:45

The older, more established affluence of the greatest holdings, but even younger generations, are building significant amounts of wealth which they're going to, it's going to grow as they continue.

6:02

They're earning power over time, establishing financial health and strength, A, it truly is a muscle building exercise, it requires dedication.

6:14

It requires commitment, and in many cases, it requires a trader in the form of, you know, financial provide providers, professionals, and advisors.

6:27

If you attended our January webinar, you already know that 2021 was a very good year for us.

6:36

In fact, nine out of ten affluence told us that their family's finances kind of steadily improved compared to the previous year.

6:49

Our fall 2021 data showed an actual increase of 18% or household net worth compared to the previous ball.

7:00

If we look at at all of this data, we have since 2017 the average affluent household has actually seen an increase of almost a quarter of a million dollars in net worth.

7:15

That growth is really expected to continue.

7:19

You know, 35% of affluence tell us that they believe their investments are going to continue to grow significantly in 20 22.

7:30

Now, of course, it isn't easy. No. one easily attains wealth without working hard.

7:37

And although many affluents use financial advisors, the reality is that they're actively involved in the development of their financial strategies.

7:47

They take personal responsibility for their financial.

7:50

Well, being substantially more than half of them say that they have the primary or final say, in the households financial decisions, and additional 32% say that they shared decision making.

8:07

It's interesting to note that men are more likely to say that they have the, quote, unquote, final say, While women are more likely to save that, they share responsibility.

8:21

I personally think the difference says more about the Male Ego that it really does say about the actual decision made, since I believe that in most of these households, the There is more sharing of final decision making than might see.

8:40

But still, you know, it will be look at that.

8:42

It's important to see that that affluence take their finances seriously.

8:48

You know, there's a lot at stake and they're not going to easily ignore it.

8:56

Now despite all of the events of the last couple of years, most affluents feel financially secure, especially the older generations, especially the boomers and seniors.

9:09

As you can imagine, Gen Z is the least likely to say that they feel actually secure.

9:17

But interestingly, at all, this, Gen X is actually more hesitant about their finances. Then, Millennials said, generation before them.

9:28

This may have to do a lot with their life stage's.

9:32

This is Gen X, But the group of people who have children, or possibly intro to college, they've got big expenses, and they're really beginning to realize that retirement is getting closer, they need to be prepared.

9:50

So thankfully, a significant majority of them still feels that they have a little money left over for Indulgence which is important too to Marketers in general.

10:06

But it also says a lot about their investments.

10:09

Most afterwards, feel secure, 610 of them, do say that. They are worried about the very worried about the occur.

10:19

We'll get into that in a little bit more detail because there's good reason for them to be concerned with the economy.

10:27

Based on data that we see from the Federal Reserve Board, you approximately a third of affluent network comes from stocks and equities.

10:36

So it's not going to be a surprise. When we look at a statistic, like 53% of affluence, say they follow the stock market closely.

10:48

Now most affluence do work for stability in their investments.

10:53

80% of them say that they make investment choices and they stick with them, compare to you're actively moving in and out of your investments.

11:05

You know, in fact, as we look at affluent portfolios over time, really see that there are applications, you know, among the different types of financial instruments is relatively stable.

11:19

If we look at the last five years, we really see little movement in where they place their financial bets.

11:28

They clearly, excuse me.

11:30

They clearly have to diversify and they see that as a, you know, as a means to balanced growth with safer investments, really there to hedge against market changes.

11:42

A note of caution in looking at this, which is really that half of their investments are tied up at stocks and bonds.

11:50

So no wild swings in the stock market could impact well in the short term.

11:57

But most affluence are not of the mind that they're going to make rash decisions, quick decisions.

12:06

So they, you know, they're in it for the long haul, know.

12:10

But that said, Regally not talking about wildly speculative investors will be talking about that.

12:20

Fact, when we asked them to describe their approach to investing, fewer than, you know, a few of them consider themselves high risk investors, most classified themselves as as willing to take a moderate risk, yeah, Those high risk investors tend to be more male than female, and they definitely tend to be younger.

12:44

Younger investors longer run way before retirement.

12:51

They can afford to take risks, Boomers and seniors are not willing to, to take or try.

12:58

Jessee is going to talk more on that subject when he discusses blockchain technology.

13:06

So let's look at who these different types of investors are.

13:12

The people who describe themselves are taking a high risk approach.

13:16

You know, are the people who are most likely to be bullish on the US economy looking forward.

13:23

As I mentioned, these high risk investors are predominantly male.

13:27

They're a little younger, and they actually have a great depth of financial insolation already.

13:35

So for them, that, you know, they can afford to take more risk, because they have a bigger pushing to fall back on if an investment goes out.

13:45

We're going to talk a little bit more about this, but cryptocurrencies, which you might look somewhat precarious suit.

13:54

You know, some of the older investors, like me, they found acceptance by even affluent who consider themselves to be low or moderate risk takers.

14:07

Now, the high risk investors are also much more likely to utilize these newer tools.

14:14

With almost half of them utilizing rowboat brokers or Rover Robo advisors, as they plan their financial strategies.

14:26

So, we've seen a lot of turmoil in the last couple of years between the pandemic, between changes in the administration, changes in that marketplace.

14:39

The events of the last several weeks have really added to a sense of uncertainty in place.

14:46

With that in mind, let's take a look at what's likely to happen to act with money over the next several months.

14:56

First, let's, let's understand the reason why this is so important and why we emphasize this.

15:05

There is an oversized impact that the app that Apple wins have in the US.

15:12

According to the Federal Reserve board, the top 20% earning households control $96,000 billion as well.

15:22

one in every three of those dollars that well is sitting in corporate equities, in mutual funds, that's $35,000 billion.

15:34

Now, on the other hand, when we contrast and look at the lower income in council, lower income Bernie Sanders, we see that most of their net worth is in their own home, equity in retirement.

15:49

So, that means that the investment's held by the top 20% of the country, are almost as large as the combined total for the remaining 80% of the country, it also means that apple finances can be impacted more by market changes.

16:08

Both, good and bad. Certainly good over the last several years.

16:13

And, you know, bad over the last couple weeks.

16:18

Now, the good news is that affluents remain relatively upbeat about the year.

16:24

Almost half of them are optimistic about the US.

16:27

economy and this is better than than where we sat.

16:31

About three months ago and pessimism about the economy had risen sharply.

16:38

It remains to be seen as new inflation.

16:44

Information comes out if this is going to hold but it's really a far cry from where we were during the worst of the pandemic when pessimism really outweighed optimism.

16:57

That was the first time that happened since the debt ceiling crisis almost 10 years ago.

17:03

There are clearly warning signs on the horizon which are going to dampen this enthusiasm, talk about that in minutes.

17:12

But as we look at the trend over time, we see that there's a distinct correlation between stock, market performance and affluent optimism, and then all makes sense given how much of their net worth is tied up in that stop.

17:30

So taking a deeper look at the overall affluent portfolio, around a third of the total value is sitting in mutual funds and market Money market.

17:42

An additional 22% is coming from stocking company, either that affluents work in or through other corporate stock.

17:53

10% is invested in mutual, excuse me.

17:57

Municipal and corporate bonds are government obligations like T bills.

18:03

Then, an equal amount is sitting in checking or savings accounts.

18:07

Nobody's exchange, traded funds and equities each account for about six or 7%.

18:15

And there's a relatively small amount that's invested in close ended funds, foreign currencies, and other securities.

18:23

Give them these levels.

18:26

You know, let's take a look at what Affluence planned to do in 20 22.

18:32

So we've already seen that most apple's view themselves as moderate risk takers when it comes to their investments.

18:39

The largest proportion 62% of these moderate risk takers are not planning significant changes in the narrative best fit strategies for this year.

18:53

About 14% of them do expect being more conservative in their investments, while slightly more 24% plan to be more aggressive this year.

19:05

Two thirds of low risk investors are planning to maintain what they've been doing in August 104, plan to be more conservative.

19:14

And that's not really surprising, given the fact that they are risk averse.

19:20

On the other hand, and when we look at the high risk that people are willing to take risks, almost half of those people say they're, they plan to be more aggressive in 20 22 with their investments.

19:34

Yeah. I think that it's also helpful. We can present lots of charts, but it's also really helpful to hear directly from people.

19:44

You know, for most affluence is a steady as she goes plan when it comes to managing your money.

19:52

They have seen tremendous increase in wealth over the last several years, despite the difficulties that were brought on by the pandemic.

20:02

But as you know, as a result, many of them are just simply not interested in changing their, their overall approach to their finances.

20:11

Many of them are looking to maintain a balanced portfolio.

20:16

They were evaluating reapportionment of where their money sits.

20:21

So for a number of them, they've got an eye on the economic issues that are you in front of us.

20:30

And they're looking to find approaches that are more immune to, you know, sort of recessionary fluctuations.

20:40

Now we have also seen over time an increase in the number of affluence, percentage of applicants, who are saying that they have an interest in supporting environmental and social concerns through their investments and I think we're going to continue to see them.

21:01

You know, as we, you're seeing more and more affluence telling us that they that their relationship with companies is impacted by that, the social policies at those companies.

21:17

So to be sure, you know, when we look at this, you know, so much of the network of our needs is coming from stocks.

21:25

Then there's always going to be a constant eye on the market.

21:29

You know, both to protect their assets and really to potentially take advantage of new opportunities, especially when they sense that there are bargains that they can take advantage of.

21:43

The good thing is that they've got the money and the ability to do that.

21:48

And they will, they certainly will.

21:51

It all comes down to, you know, back to the old adage out, know, that ain't broke, don't fix.

21:59

And I think that for many affluents, the strategies that they have had in place for some time been very successful for them.

22:08

So they're enjoying the rewards.

22:11

Yeah, that's not the case for every app or an investor.

22:15

Particularly, know, for younger investors, it's a different story. They're looking to establish themselves to solidify their investment approach in their strictly wrong strategies.

22:29

These younger investors do need help.

22:32

They're not afraid to ask or antibodies, but they need more help.

22:37

Certainly then people who have been pursuing the same sorts of strategies or establishing more of a push, if you will, we're going to talk a little bit more about where that advice is, Cliff.

22:55

So, you know, how Indian hero is all this going to play out For 2022, we've talked a lot about the steady as she goes, kind of approach, you know, the no change approach.

23:08

But we do want to point out that over the last few years, the portion of affluence that that planned to be more aggressive with their investments has actually grown, it's likely due to two factors.

23:23

First, the stock market returns.

23:26

They've grown so rapidly in the last few years that perhaps there's a person, you know, lower perceived risk investments than there were a couple of years ago.

23:40

And that's certainly could change, you know, as an Apple In some watch, their portfolios in their investments deflate, somewhat, as the market goes down.

23:52

The other factor that we should point out is really the changing face of what's in general, you know, as the generation shift.

24:03

Were Gen Z is millennials come into the affluent population. There are different breed of people.

24:09

They're very different terms who they are compared to boomers and seniors.

24:16

They're much more likely. To be multicultural, they are women.

24:22

No proportionately then.

24:24

The older generations, you know, end with that change in who they are, comes a change in style, a change in the kinds of risks that they were willing to take.

24:38

So, you know, we're going to continue to see the younger generations take on more risk and effort to build wealth or, you know, for a number.

24:52

When we look at this generationally, it's particularly evident among millennials.

24:59

We're looking at it in almost half of them.

25:02

They're telling us that they plan the work aggressive with their investments this year.

25:09

They're the least likely to say that they're going to be more conservative.

25:14

Boomers, who are either close to or are already in retirement, are more likely to say that they're going to stay the course or adopt a more conservative approach. You know, and that's certainly more true for seniors.

25:30

That leads us to talk about Gen Z, which is A It's an interesting group in there.

25:38

Many Gen Z are still living with their parents, but those that are working are really only the beginning phase of their careers. So it's going to take them some time before they really establish their investment style.

25:55

And that will happen clearly.

25:58

But you know, on the horizon, there are things that are concerning, and let's take a look at what might stand in the way for or affluence. There are definitely storm clouds on the horizon.

26:13

These are things that make affluents worried about how it's going to impact their earning potential, how it's going to eat into their spending power.

26:25

Inflation is one of those things that is very scary.

26:31

It is the number one fear, or affluence, in terms of whether it will have a significant impact on your finances.

26:39

In 20 22, 58% of affluence are telling us that rising inflation is going to have the most significant impact and with inflation rates at the highest level.

26:53

And then in 40 years, it makes sense that, relative to just a year ago, there are so many more people who are worried about this.

27:06

In fact, it's 2.5 times more, there was just a year ago.

27:12

So inflation has always been in the background.

27:16

It's been a concern, but it is, you know, obviously, front and center right now.

27:23

In fact, regardless of age, inflation is the number one issue, there, number one here, Less so for younger affluence, you're really at a point in life when their salaries are increasing, as they're advancing in your careers, they may not be keeping pace with inflation unless the career advances, but but the fact is that they're going to rho minus rho as they have career.

27:52

No.

27:52

On the other hand, we have older affluence who've already made their money and they they don't have the benefit of continued salary gains to hedge against inflation and they see it, Is eating into their wealth in a way that just they don't have the ability to recoup lost ground.

28:18

Now, beyond inflation there, there are lots of concerns.

28:24

It's the biggest.

28:25

Yes, but there are other issues that are really weighing quite heavily on minds, no, particularly continued, effects, impacts of the coronavirus, and the pandemic, as well as national politics, which certainly are not seen.

28:44

A more unified country.

28:46

We continue to have, you know, a great deal.

28:51

Political infighting, and that is a concern are many afterwards.

28:57

Now, the bottlenecks that are that are happening as a result are, you know, are worrisome in the sense that it could impact the economy moving forward, market, so and so on.

29:12

Now, I should point out that millennials, the people who tell us that they're most likely to be aggressive in their, we're aggressive.

29:24

Are also the least likely among all of the generations, just to cite concerns about things that might impact them negatively in the next year, you know, across the board.

29:38

They generally have relatively low scores in terms of fears.

29:47

Yeah, food parse our concerns by looking at risk.

29:53

You know, the willingness to take risk, what, where we do see, you know, the continued issue of everyone's worried about inflation.

30:03

But those who are the high risk investors, are the, you know, are less likely than low risk and moderate.

30:10

Investors, moderate risk investors in terms of the fear about inflation.

30:17

Almost as many of the high risk impact investors say that market volatility is as concerning, that makes sense, given that they put more money into play.

30:31

And you know frankly stand to gain or lose depending on how the market reacts.

30:40

Not surprisingly, as we look at this, the lower risk investors are the least fearful, aren't cheating are the most fearful about inflation and the lingering impact, the coronavirus pandemic.

30:55

These are people who are just in general worrisome or worried actions.

31:02

So, you know, given all of this, you just exactly how do afterwards plan to hold on to their hard earned, you know, how do they build further build their financial muscle.

31:17

So if we look at the types of financial accounts that that Apple and so we can see just how just how diversified they are.

31:27

While the largest proportion of affluents have money and 401 K's for Ruby, that counts almost as many have non retirement investment accounts.

31:39

About six in ten have real estate investments beyond their primary home.

31:45

And more than a third of them have into DC's are non-qualified deferred compensation plans, you know, which are or the highest earners through their place of employment.

32:00

Know, a particular note for intent affluence.

32:04

Say they now have money invested in cryptocurrencies.

32:08

Now, let's look at what they plan to do in those accounts in 20 22.

32:14

Overall, we see is that applicants are planning on increasing the amount of money they contribute to these accounts.

32:22

One in four of them saying they're planning to increase their 401 K contributions, and 105, saying they're plenty more money and non retirement investment.

32:33

So that they're looking to, to actively improve their, their financial portfolio.

32:43

That's a very small percentage, you, between 6 and 7, 6, and 8%.

32:48

No plan to invest less across the board.

32:52

I should point out that affluence that own the newer investment instruments, things like cryptocurrencies are in the T's.

33:03

You know, these are the people that are most likely to say that they're going increase the amount of money that they put into these types of investments in 20 22.

33:16

So I'm going to turn this over to Jessee now, is going to take you through an understanding of how affluents to develop those strategies.

33:24

Jessee, over you.

33:26

Hello. Yeah. We're gonna go through affluence, develop their financial strategies.

33:33

So you see this slide about just less than half develop their own strategies with little to no help and 36% will do their well kept guidance but ultimately make their own decisions.

33:48

Only about 20% of affluence are just giving their money over to a financial professional and saying you handle it and wiping their hands of it.

34:00

This means that about 80% of the effluents are making their own decision making the final decision for themselves, but 55% are using guidance, whether or not they listen to all of it, or not go to the next slide.

34:18

So, who are they using as their advisors?

34:23

Everybody.

34:25

The, this chart basically shows the churn. They expected churn in over six, over the course of a year, for what what people are using.

34:38

On the right, you can see, these are the people who are online trading, 31% of affluence.

34:47

or have been doing it and we'll continue to do it, 16% have been doing it and we'll drop them and won't in the next six months and 14% are going to start doing the next six months. So at any given time you have about 45% of the affluent population online trading.

35:06

Um, see, the tax consultants and CPA's have the biggest growth in the next six months.

35:14

This was fielded in January So, you know, people aren't necessarily looking at their accounting yet at the end of the year, but know, they will be in the, yeah.

35:25

For the start of the year, um, robo advisors are pretty stable, if small, whilst advisors the same, we're seeing a lot of growth.

35:38

The only place where we're seeing shrinking is in the online training area, but that's still much more people in the population doing that than any other of the financial advisors. If you go to the next slide.

35:57

So, where are people getting their advice? Mostly the Internet and from recommendations, people will take there.

36:05

People are more likely to use recommendations from their financial advisor, friends and family, or industry experts, more than any other kind of venue of information.

36:19

Website articles are going to be the biggest, because that's where people are looking up for news.

36:27

And they traditional media, the the newspapers, TV, magazines, radio, are all on the smaller end.

36:36

But that doesn't mean that advice you get from those is less valuable.

36:40

It's just less likely to be used by effluence, podcasts is also fairly pretty low, um, but that these are where people are getting their advice from you. I go to the next slide.

36:58

Um, so you can see this is on the high risk, low risk, moderate risk.

37:06

Everybody use this website articles.

37:08

The moderate risk are really dependent on them, but it's the highest among all sources of information, for people, for all groups.

37:21

Website videos are extremely high among the high risk, as well as financial blogs, and forums, and some are phone and tablet apps.

37:31

There, the high risk people are looking at their phones and looking for advice and making changes on the fly.

37:40

In ways that the low and moderate risks may be putting their money away and not looking at it again.

37:48

So they're not as.

37:52

Into the other sources of information that they are looking for, the long form information.

37:59

If you can go to the next one, Tony, Uh, here, you can see that it, recommendations are use, Bye.

38:11

Most by many effluence the, but, they're most likely to be used by low risk individuals.

38:19

They're the people who, know, if you come dear friend with a stock tip, they're gonna use it. But they're probably not gonna go to a user of your social media to find stuff. The opposite is basically true for the high risk individuals. Who, again, the user reviews aren't that important.

38:39

But social media is, when you're going to be making a lot of trades and stuff like that, you're gonna be looking for quick information sources, and not necessarily waiting around on the stock tip.

38:54

Do I go to the next one?

38:59

The financial professionals, they're used kind of across the board, on the risk factors hits, it doesn't affect where people are going for advice, low, moderate, and high risk, use, financial of their own financial advisors, or industry experts.

39:22

Kind of the same way, which, compared to something like the social media on the last slide, or, uh, yeah, though, website information. You're here really getting some.

39:39

People are coming to the advisors, with a kind of sense of, I'm going to listen to this person in advance, so say, do at about the same rates.

39:53

Tony, feel I take it back for.

39:57

So, thanks, Jessee, and you're speaking of the financial advisors.

40:02

Let's take a quick look at what's important to affluents when it, when it comes to getting advice, who they trust.

40:12

Know, clearly, there's uniformity in the desire to have a trustworthy advisor. This has just been consistent over all the years. We've been measuring it.

40:23

Trust, you know, feeling that the company that you're working with, professional that you're working with has your best interest in mind is, is the most, the single most important factor.

40:38

But, you know, when we look at it, the quality of the advice, which granted, is subjective, it's a close second. For most affluenza, although, you know, again, millennials tend to be a little bit different. They talk about transparency being the next most important factor.

41:01

Whereas, qualities is down.

41:03

Just slightly from, from there. But you can see, you know, as you're looking at all these factors, that it is about making sure that the person has your best interests at heart.

41:17

That they are being very open about what they're doing, about what they're recommending.

41:24

That they've got good customer service, because it, you know, it clearly is an important topic to people, and they want to make sure that they're going to have a relationship with someone that is going to be beneficial to everyone.

41:43

You know, when we asked them for the most trusted brand, which find the actual company, they trust the most.

41:52

The, and this is an open-ended question.

41:56

The number one brand, for some time, now has been fidelity, followed pretty closely by Vanguard, You know, and some of the others.

42:06

The, we we sense that most of this, or much of this, is really related to who their company, who their lawyer uses, for, for one case.

42:21

So, these are companies that are holding a large chunk of money that people are putting away from retirement, It is a relatively stable thing. There are, you know, they're not necessarily making rapid changes here.

42:38

But the fact is that that because of that relationship, these companies are well trusted.

42:46

And, you know, they are the kind of companies that they hold up as being the best companies to work with.

42:58

Human interaction is, you know, it's always preferred, But, you know, in many cases, the, you know, the finance decisions really want people weren't to base those decisions on data.

43:15

You know, so, when it comes to this, it's that interaction between human behavior, or human advice, data, your waste, we look at it for some time, now, where we've been measuring this.

43:30

There are about three quarters of the people say that they would prefer a recommendation from a Human Advisor, versus about a quarter of the people saying, then, they look for advice from data algorithms.

43:50

Now, you know, when we, in turn, then ask them if they are looking for recommendations from a Human Advisor or recommendations from a rowboat broker or Robo Advisor for many years now. You know, we've seen that there was this continued resistance to the knee.

44:11

That, while people said that, they know they benefited from the data side of things.

44:20

Very few of them felt comfortable with the recommendation and that's actually changing.

44:26

So this is the this year it really is the smallest change from the you chairman judgement versus data, the algorithms to recommendations from human advisor to Robo Advisor.

44:43

And that's, you know, so not surprisingly, we're seeing that this is likely the result.

44:51

Robo advisor usage growing people are more comfortable with the concept.

44:56

Back in 20, 22 years ago, only about 8% affluence said that they used a rowboat broker or advisor that rose to 20% when we asked them about their use in the last year.

45:13

And now, in terms of their likely use in the next 12 months, we're seeing about 37% of the affluent saying that, yes, they're likely to utilize a robo broker or robo advisor, which is just a, you know, a huge increase for work or justice.

45:34

Now, you know, there are six, and there are some reasons, why affluence will not use financial advisors are who are concerned about it, The the largest reason is that they think that fees and transaction costs are just too expensive, they would rather do this on the row.

45:56

They think they can do a better job managing their own finances and that, you know, comes from the intelligence that affluents half about.

46:06

They find answers about the market.

46:09

These are, you know, people who are attuned to you to the news they, they watch, what is happening in the world around them.

46:19

About a third of them are telling us a day, or they don't think they're. finally, it's a complex enough.

46:24

To utilize a financial advisor, and that often is coming from the younger groups for women, more than men.

46:34

But, you know, the, the impact for financial companies, or who are looking to gain new customers, if they really need to start looking at this and say, OK, it doesn't matter how complex your find and how big your finances are complicated.

46:53

It really is a matter of, we can help take what seems to be simple and help it grow.

47:01

Yeah.

47:02

There's, You know, to be sure, when we look at the trustworthy factors that we saw a couple of slides ago, there is a significant concern about trustworthiness.

47:12

And whether or not somebody, you might not have their best interests in mind, might be trying to, scam them, might not be able to find someone they trust.

47:25

So, you know, as we look at that these are the the impediments the financial companies are going to need to come back from in order to to gain these these investors.

47:39

Moving forward, one of the interesting things really is know what affluence think of cryptocurrencies and FTEs.

47:49

So the Jessee, I'm gonna turn this back over to you, talk about the iteration. So the next few slides we're gonna look at what some Affluence think of cryptocurrencies. And then FTEs and we're going from younger affluents to older affluence, and you should notice a theme.

48:08

How they view them, feel and start going through.

48:13

They're the latest technology, and it can be very valuable if the investor has enough knowledge from a Gen Z female, 24 year old.

48:22

Move on. I plan to invest more free money. I have an FTE and cryptocurrency sets from a Millennial male, age 28.

48:33

Trying to diversify a little more.

48:35

I want to reach research crypto and ..., which are Real Estate Investment Trusts, to see if I want to add that into my portfolio. Mar's a millennial female 31.

48:50

I think they're here to stay and want to invest a reasonable mountain while trying to diversify to negate their volatility Millennial, male 35.

49:02

I've decided to sit them out of grief ethic on stability concerns, and their nightmare for the environment, and that Gen X female age 43.

49:13

They are interesting, but very risky. I do not think they should be considered for primary investment similar to gambling in my mind.

49:20

That's a Boomer female 61. I still don't understand them. I keep talking to different people, hoping I'll find someone who can explain them clearly enough for me to comprehend.

49:32

Boomer male, age 66, says, you can say that, so you get older, people tend to get a little more negative or distrustful of them of these new technologies.

49:49

I'll move on, Tony, The younger generations really find crypto appealing.

49:58

The older generations really, don't.

50:02

You can see here four, thinking it's a better investment than the stock market.

50:09

Millennials, majority of them think that it is a better investment. The Gen Z is a little less bullish and Gen X and boomers and seniors are almost negligible.

50:26

Really, one of the things that drives this I think, is the MLN Cryptocurrencies really started coming up and they early 20 tens, which is when millennials were starting to really take over the job market and investments.

50:51

And, you know, if you put in for a dollar Bitcoin in 2010 or whatever it costs, you're, now have $38,000.

51:03

That Gen Z may have missed a little bit of the boat on the Gen X, didn't never got into it. Neither did Boomers, are seeing gears.

51:13

Can I go to the next slide?

51:20

So what we're seeing is that Millennials and Gen X, Gen Z ERS really are say they're familiar with them.

51:31

Millennials, almost 70% say they're somewhat or very extremely, or very familiar.

51:39

Gen Z is about 50%, or, excuse me, 60%, extremely, somewhat familiar.

51:49

And then if you want to click: 61% of Millennials own digital currency, it's it's about 30% of J Gen Z, And that first is about 3% of Gen X and negligible amounts.

52:08

Boomers and seniors who own ugh, digital currencies.

52:14

So, really, all of that familiarity is resting in those younger generations if you want to move on.

52:24

And it's not just that. All of the knowledge is there.

52:29

The older generations just don't want to know more about them. Yeah. 3% of boomers and seniors say they're extremely or very interested in learning more. Orange and Gen X, you have about 13%.

52:44

Yeah, The drivers of wanting to learn more are going to be the younger groups as well.

52:53

Next Slide.

52:55

Now on to NS Ts.

52:59

Millennials and Gen Z So, again, are you the ones who are adopting them?

53:05

You have, ownership is almost entirely in the Millennial and Gen Z, um, age groups with Gen X and Boomers, barely having any.

53:18

And as you can see, the interest in learning more is Gen Z and Millennials, millennials.

53:24

You might be a little behind Gen Z on FTEs, which is why they feel like they need to catch up, because you're seeing NFC tea stories everywhere.

53:38

We saw this morning that Snoop Dogg has a new N S T.

53:44

That made him 40 something million dollars. So it's a good source of income for the artists.

53:52

It's A Interesting source of collectable, four, the owners of them, but we're really just kind of scratching the surface of where these are gonna go, uh, you wanna move on.

54:11

So what does this mean for financial companies?

54:15

Uh.

54:19

So thanks, Jesseica.

54:21

You really we'd like to sum all this up in four categories, and the first is that affluence or really talking about staying the course there, they've taken advantage of a hot stock market but most of them are adopting this, this moderate risk approach to their finances.

54:45

There have been successful, they're sticking with the basic concept, they see very little reason to change in 20 22.

54:56

But they are keeping an eye on inflation and other things, and it will remain to be seen.

55:02

Just what happens as a result of either major fluctuations in the stock market, or, you know, conceivably the impact of a, you know, a major conflict overseas.

55:19

On the gendercide, you know, we clearly see that there are, differences in the comfort level, their approach to investing, They're often making joint decisions.

55:33

You know, so it's important for financial companies to be speaking to both genders, but speaking in a way that is explicit, or the genders individually, You know, certainly to make sure that they are making women feel comfortable that they are stressing the trustworthiness is that they're taking your assessment of how willing people are to, to risk or to take high risk investments.

56:10

Eyes have generations.

56:13

You know, we're seeing clear differences and, you know, older versus younger, affluence based on their life stage. Younger affluence are going to be higher risk. There.

56:24

You know, more interested in newer technologies, they're going to keep trying to invest as much as they can.

56:37

On the other hand, regardless of the age, the athletes are looking up.

56:42

Many sources of information at the financial advisors are still very important to across the board.

56:51

And then with the new technologies and cryptocurrencies and then FTEs there here for younger affluence.

57:02

And the older generations are just staying out of them.

57:07

Many of the Gen Z and millennials look at this as the future of money.

57:13

And they haven't had any reason not to yet.

57:17

So, that, you know, we're going to see this continue to grow through 2022.

57:25

So, that really brings us to the end. We want to thank everybody, again for joining us today.

57:33

We hope we've provided some good insight. Pretty use. Do feel free to reach out to us if you have questions, or if you want additional information.

57:47

So, have a great rest of your day, and, you know, again, thank you for joining us.