A new white paper from Janus Henderson Investors identifies several primary themes influencing investor sentiment and behavior as the 2024 US presidential election approaches, with findings suggesting that investors are taking a more cautious approach amid growing political uncertainty.
The survey, which polled 1,000 affluent and high-net-worth investors, offers insights into how political, economic, and technological shifts are shaping financial attitudes.
Among several central findings, the report found 78 percent of respondents citing the election as the top issue affecting their financial decisions over the next year. This concern eclipses inflation (70 percent), high interest rates (57 percent), and the risk of a recession (55 percent). Many investors plan to reduce their risk exposure until the election is done and a winner's declared.
“It is common for investors to experience heightened anxiety during election years and to make emotional decisions about their portfolios as a result,” the report notes, suggesting that advisors play a crucial role in guiding clients through this uncertainty.
Another notable trend is the continued shift away from equities. According to the survey, one-third of respondents moved money from equities into cash or fixed-income assets in the past year, with 32 percent planning similar actions in the coming 12 months. This shift is driven largely by concerns over market volatility and higher interest rates, but certain sectors remain attractive to investors. Technology and healthcare/biotech were identified as strong investment opportunities by 73 percent and 62 percent of respondents, respectively.
The report also touches on growing fears related to artificial intelligence and financial exploitation, two areas that the SEC also highlighted in its latest statement of priorities. Seventy-three percent of investors believe that AI will increase the risk of financial fraud, and over half of respondents expressed concerns about falling victim to scams.
Read next: The greatest investment scams in history
“With financial scams increasing due to the proliferation of AI technologies, it is critical to educate clients on the growing risk,” the survey states, emphasizing the need for advisors to arm clients with resources on fraud prevention.
Lastly, while investor satisfaction with financial advisors remains high, with 98 percent of those using an advisor expressing satisfaction, the survey points out risks from potential overconfidence in financial literacy. Most investors demonstrated a solid understanding of financial basics like compounding and diversification, but some overestimate their financial knowledge. This creates an opportunity for advisors to provide further education, the report suggests, noting how “advisors can help clients better understand emotional biases like overconfidence through targeted financial education.”
The finance professor and quant investing veteran believes with the right guardrails, artificial intelligence could be trusted to meet the high bar of fiduciary advice.
UBS has also regained some ground as it recruited an experienced Merrill advisor in New York.
The ex-Bay Area broker reportedly continued to peddle fake bond investments, promising rates of returns exceeding 20%, even after FINRA suspended his license in 2014.
Predictive analytics, artificial intelligence, and cybersecurity are now high on compliance officers' lists as off-channel communications are relegated down the rankings.
Latest deal further expands the RIA acquirer’s footprint in Texas.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
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.
