Investors' risk tolerance is increasing, but slowly due to concerning factors

Investors' risk tolerance is increasing, but slowly due to concerning factors
Risk aversity has fallen compared to recent years, new report reveals.
OCT 16, 2024

American investors remain risk averse overall, but there are signs that tolerance is rising, albeit slowly due to multiple concerns.

A new report published today (October 16) by F&G Annuities & Life shows that 73% of investors polled for its Risk Tolerance Tracker said the events of the last 12 months have made them less likely to take financial risks.

However, this is down from the 78% of respondents who expressed increased risk aversity in 2023 and 2022.

But inflation, recession, and the presidential election are all key concerns (80%, 72%, and 72% respectively) among investors particularly in how these factors impact their financial future, especially retirement plans.

Cybercrime/fraud (63%), geopolitical risks/tensions (61%), historically high debt (59%), stock market volatility (59%) and the impact of Generative AI on finances (50%) are other leading concerns.

Baby Boomers are most likely to feel concern about the election impacting their financial future, with 80% of respondents of this generation saying so compared to 72% of Gen Xers, and 64% of Millennials.

Worries about the impact of recession are more widespread but the two older generations revealed a worrying lack of professional advice, given their close proximity to retirement. More than half of Baby Boomers and almost two thirds of Gen Xers do not have a professional financial advisor.

Despite retirement income – and factors that may reduce it – being a key focus for respondents with 88% citing guaranteed income as important, just 14% said they own an annuity.

“Our fifth annual survey shows that while risk tolerance is modestly increasing, uncertain economic factors continue to weigh on the minds of American investors,” said Chris Blunt, CEO of F&G. “Yet at the same time, many investors are not taking advantage of the tools they need to plan for the long term, such as leveraging an advisor and building a balanced portfolio that includes guaranteed income products. Being proactive now can give investors more peace of mind in the months and years to come.”

A recent survey from Nationwide also highlights concerns about the risk of current factors impacting retirement income with advisors stepping-up portfolio protection strategies amid client election jitters.

Latest News

Judge OKs more than $90 million in settlement money for GWG investors
Judge OKs more than $90 million in settlement money for GWG investors

Mayer Brown, GWG's law firm, agreed to pay $30 million to resolve conflict of interest claims.

Fintech bytes: Orion and eMoney add new planning, investment tools for RIAs
Fintech bytes: Orion and eMoney add new planning, investment tools for RIAs

Orion adds new model portfolios and SMAs under expanded JPMorgan tie-up, while eMoney boosts its planning software capabilities.

Retirement uncertainty cuts across generations: Transamerica
Retirement uncertainty cuts across generations: Transamerica

National survey of workers exposes widespread retirement planning challenges for Gen Z, Millennials, Gen X, and Boomers.

Does a merger or acquisition make sense for your firm? Why now is the perfect time to secure your firm’s future
Does a merger or acquisition make sense for your firm? Why now is the perfect time to secure your firm’s future

While the choice for advisors to "die at their desks" might been wise once upon a time, higher acquisition multiples and innovations in deal structures have created more immediate M&A opportunities.

Raymond James continues recruitment run with UBS, Morgan Stanley teams
Raymond James continues recruitment run with UBS, Morgan Stanley teams

A father-son pair has joined the firm's independent arm in Utah, while a quartet of planning advisors strengthen its employee channel in Louisiana.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave