NEW YORK (1/27/11)--Affluent consumers lack confidence in their financial future, with 63% of those surveyed believing that preparing for long term goals such as retirement and college education will get harder. However, 75% of the mass affluent were "highly satisfied" with the advice they receive from their credit unions and banks, according to a report released Tuesday by Bank of America. The Merrill Edge Report reviews the financial concerns and priorities of "mass affluent" consumers with $50,000 to $250,000 in investable assets. The report was timed to release with the bank's announcement that it was launching an initiative targeting "mass affluent" consumers (The Associated Press
(Jan. 25). Of the 1,000 mass affluent consumers surveyed, 52% sought trusted financial advice from their credit union or bank, and 53% from financial professionals, while 36% sought trusted advice from family and friends. (Plus News Pakistan
Jan. 25). Nearly two in five (36%) say they are low-risk investors, with 45% indicating that their investment decisions today are more conservative than they were a year ago. Nearly half (45%) believe they will never be wealthy, even though 75% of respondents have a six-figure household income, the survey said. Balancing short- and long-term financial needs is a priority for 63% of mass affluent, but they struggle to accomplish this, the study indicated. In the past year, 28% tapped into their long-term investments such as college savings accounts and retirement to meet their monthly living expenses. Those who dipped into their nest eggs did so for monthly bills or groceries (29%) or to make a mortgage or car loan payment (14% ). Half (51%) of the respondents do not currently have a formal or written plan. Of those who had a plan in the past, nearly 60% met the goals they set. Among the concerns of the mass affluent are:
* Rising cost of healthcare, 72%; * Ensuring retirement assets last throughout their lifetime, 67%; * Being able to live the lifestyle they want in retirement, 58%; * Worrying about tax reform, 62% and the economy, 60%, on their finances; and * Retiring later than expected, with 41% saying they will retire later than they expected a year ago.
What should a credit union or other institution focus on in attracting the mass affluent member? The report noted this group would like to:
* Know more about federal and local regulations affecting finances and investments (58%); * Have access to a complete picture of finances and investments in one place (58%); * Know how to appropriately allocate assets across investment options (57%), more about financial markets (55%); and how to better manage cash flow (50%); and * Receive professional financial advice (56%).