Investors Need Adviser Help to Navigate

Fred Schneyer

September 23, 2009 — Financial advisers might have significant opportunity helping Americans figure out where their investments are and where they need to go, a Hartford poll suggests. —

Americans in a recent poll were less confident and more conservative about their personal finances than they were a year ago, according to a news release about the Hartford Mutual Funds Findings.

Most notably, U.S. investors responding to the poll were open to fresh approaches to asset allocation. Fifty-three percent are more invested in bonds or cash.

A significant goal for many respondents: just trying to hang onto assets they have now.

“This may sound like bad news, but it’s actually a tremendous opportunity for financial advisers,” said John Diehl, senior vice president with The Hartford’s Investment and Retirement Division. “Investors admit they are unsure what path to take as we emerge from the financial crisis, and the adviser can play a crucial role in helping to identify next steps.”

According to The Hartford, respondents knew their holdings were more conservative than a year ago, but couldn’t explain exactly why.

While 30% said their portfolios are now more allocated to bonds, 28% don’t know how much of their total portfolio is allocated to fixed income. Some 72% said bond diversification is important, but when asked specifically about their fixed-income investments, they floundered. More than half don’t know which fixed-income asset classes they hold.

More than half of those surveyed said their advisers have never talked to them about holding different types of bonds in their portfolio, or they weren’t sure if they had discussed it.

“Some advisers spend a great deal of time diversifying the equity portion of their clients’ portfolios, and explaining the importance of it,” said Diehl. “They may spend less time discussing bonds even though fixed-income diversification is just as important as equity diversification. This survey shows that investors need the guidance of their adviser to execute a diversified fixed-income strategy.”

The Hartford survey, which was conducted online by Zoomerang in June, interviewed 530 individual investors older than 30 who work with financial advisers. Fifty-one percent of those surveyed are retired, 32% work full-time, 12% work part-time, and 5% do not currently work.