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Survey: Market Optimism Has Nosedived, Pessimism Has Skyrocketed – for Investors and Financial Professionals Alike

Washington, DC (October 4, 2022) – Rapidly rising numbers of financial consumers – and the financial professionals who advise them – are expressing deep pessimism about the markets and the investment outlook, citing worries about the impacts of inflation, a possible recession, and global conflicts on their resources.

A new survey by Greenwald Research – part of its 10th annual Retiree Insights Program – paints a grim picture of both consumer and advisor attitudes in 2022. Optimism about the markets and investing has nosedived over the last year and is now less than half of what it was in 2021, among financial professionals and consumers alike.

After surveying more than 1,000 financial consumers between 50 and 70 years of age with investable assets of $200,000 or more, Greenwald found consumer optimism about their investments has dropped from 67% to just 31%. Consumer pessimism has skyrocketed – from a tiny 7% a year ago to 36% today.

And those sentiments are mirrored among the more than 300 financial professionals who participated in the survey. Their optimism level has slumped from 78% in 2021 to 34% today, while pessimism about the markets and investment outlook jumped from just 3% to 25%.

Financial professionals’ pessimism is also reflected in their expectations for investment returns. On average, they expect equity returns of 6% over the next year, compared to 9.7% in 2021 and 7.8% in 2020. Combined with current low expectations for fixed returns, they estimate a total return of just 4.3%.

Perceptions of Financial Security Fall

Consumer perceptions of their own financial security have also been battered back to levels last seen at the height of the COVID pandemic. Only 43% of retirees feel highly secure (down from 56%) and only 36% of pre-retirees feel that way (down from 45%).

The malaise also evident in consumer expectations about future market recoveries. A year ago, 6 in 10 said future recoveries would be as fast or faster than the record-speed pandemic recovery. Now only 44% see that as likely.

As a result – and making the current environment more worrisome – both consumers and financial professionals are more likely to be concerned about consistent small investment losses over time (37% of professionals, 32% of consumers) than about a single big loss (27% of professionals, 18% of consumers).

Responding to their Biggest Worries

Consumers’ biggest worries, according to the survey, are a high level of inflation and an economic recession – both standing at 79%. Global conflicts and crises were ranked third at 71%.

“The optimism that followed the rapid economic recovery from the pandemic has evaporated,” said Doug Kincaid, Greenwald Research’s Managing Director for Financial Services. “It’s clear that financial consumers need help navigating the current economic environment to regain confidence in the future. Our findings indicate that consumers are engaging more closely with their advisors and, in increasing numbers, are looking to their employers to provide a range of “financial wellness” resources.”

Survey results indicate that consumers are meeting with their advisors more frequently, both in person and virtually. Two-thirds of respondents have met with their advisors at least once in person in 2022 (up from 45% in 2021) and 40% had at least one virtual meeting (up from 31%).

About half of respondents want in-depth discussions about their finances once a year and four in 10 want quarterly check-ins. Perhaps more importantly, fully 93% say accessibility – most commonly seen as getting a response to an inquiry within 24 hours – is very important when working with a financial professional.

Employer-provided financial wellness resources respondents expressed greater interest in are personalized financial goal setting (55%, up from 36%); access to free or subsidized personalized financial advice (54%, up from 40%); education on planning for and managing healthcare costs (52%, up from 45%); and financial education with financial professionals, in-person or online (51%, up from 36%).

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Greenwald Research is a leading independent custom research firm and consulting partner to the health and wealth industries that applies creative quantitative and qualitative methods to produce knowledge that helps companies stay competitive and navigate industry change. By leveraging deep subject matter expertise and a trusted consultative approach, Greenwald offers comprehensive services for weaving rich research stories that answer strategic business questions. For 30 years, Greenwald has partnered with the Employee Benefits Research Institute to conduct the annual Retirement Confidence Survey.

Doug Kincaid
Managing Director, Financial Services