US’ wealthy less bullish than advisers

Millionaires are less optimistic about the US economy than their financial advisers and are taking a more cautious approach in their investments, Fidelity Investments has said.

Millionaires are less optimistic about the US economy than their financial advisers and are taking a more cautious approach in their investments, Fidelity Investments has said.

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The Boston-based brokerage giant’s latest Insights on Advice report found that brokers and advisers are more confident than their millionaire clients about all key sectors of the economy, including real estate, consumer and business spending, and the stock market.

“Examining the disparities between the groups presents some clear opportunities for brokers and advisers to fine-tune their approaches,” said Mike Durbin, president, Fidelity Institutional Wealth Services.

Millionaires prefer bonds, for example, even as advisers recommend putting more money into international and emerging markets and US stocks.

The biggest discrepancy can be found around annuities: 60 % of advisers plan to recommend them, but only 13% of millionaires plan to buy them. About half of both groups plan to allocate more money to mutual funds.

Fidelity's analysis comes one day after a Charles Schwab Corp study found the average investor lacks confidence about achieving retirement goals.

Roughly 39% of investors surveyed by Schwab have concerns about retirement, though there is a wide gap between older and younger Americans.

Confidence increased for those of any age who worked out detailed financial plans.

“Across all age groups, only 39 percent of people have actually crunched the numbers on retirement savings,” said Carrie Schwab-Pomerantz, a senior vice-president and daughter of company founder Chuck Schwab.