Neither investors nor their advisers are feeling particularly positive these days, according to research conducted by OppenheimerFunds.
One study found that in response to portfolio declines of between 30% and 39%, on average, over the past 12 months, investors most commonly felt anger (34%), followed by anxiety (25%), pessimism (21%) and/or helplessness (20%).
Just 14% said they were excited about opportunities, while only 11% admitted to feeling panicked.
Even though the emotional state of many investors is fragile, advisers who are smart about the way they engage their clients can bring in more assets, said Sean Keller, vice president of strategic marketing at OppenheimerFunds Inc. of New York.
"The facts are that here may be money up for grabs if you do a good job with your clients," he said.
OppenheimerFunds surveyed 2,245 investors 25 to 74, Nov. 21-23. All the investors had at least $10,000 in investible assets and made financial and investment decisions for their households.
For advisers, making lemonade from lemons won't be easy.
A separate OppenheimerFunds survey of 298 advisers found that 80% believed their clients who had not yet retired would have to accept the prospect of postponing retirement, while 53% said clients would have to take on more risk to achieve their goals. That's particularly tricky since 77% of advisers thought it would be difficult to persuade clients to take advantage of market opportunities.
The adviser survey was conducted Dec. 18-31.
CLIENT REVIEW
OppenheimerFunds' response to the challenge of negative investor perceptions is to identify eight investor types — four that are not yet retired and four that are — and to provide advisers with pointers about how best to deal with each type.
The firm has bundled that information in a program it calls "The Art of the Client Review: Special Edition," available to advisers via its website and in printed brochures.
OppenheimerFunds said it developed the program because 80% of advisers said they were looking to fund companies to help them with their clients.
For the most part, advisers applaud OppenheimerFunds' efforts.
Such efforts give them access to "tremendous amounts of research" they might not otherwise have, said Scott Kays, president of Kays Financial Advisory Corp., an Atlanta-based firm with $150 million under management.
And there is no denying that the more information advisers have, the better during these anxious times.
"There is some nervousness," said Micha Porter, president of Minerva Planning Group Inc., an Atlanta-based firm with $60 million under management. "For a good many clients, we tell them they are fine, but they have trouble squaring that with what they are hearing every day."
Mr. Porter deals with such anxiety by going back to "a plan that's already in place," and he believes that fund companies can help by sharing fund managers' insights.
"It's nice to be able to say: 'Here's what the fund managers are seeing,'" he said.
Fund companies such as Loomis Sayles & Co. LP and Hussman Econometrics Advisors Inc. do a particularly good job at communicating the thoughts of their managers, Mr. Porter said.
There is no doubt that such information is useful, Mr. Keller said.
But in this market, Oppenheim-erFunds' research shows that advisers also want more, he said.
"There are other needs that advisers have," Mr. Keller said.
E-mail David Hoffman at [email protected].
