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The findings from our most recent Investing Sentiment Insight Survey reveal a tremendous opportunity for advisors to educate investors across generations. Most significant was a striking, persistent knowledge gap that could prevent clients from reaching their long-term financial goals.

Short-term concerns are consuming today's investors - so much so that they're losing sight of their long-term goals and becoming distracted from sound investment choices. Advisors are in a position to help investors look past the things that are out of their control by arming them with clear strategies that may help them stay focused on the bigger picture.

Of the three "buckets of worry" public policy type concerns ranked highest on the worry-o-meter with rising health care costs and legislative gridlock tipping the top of the scale.
Another area of concern was related to economics, from high unemployment to weak real estate values.
Interestingly, concerns categorized under "globalization" - loss of US competitiveness, a weak US economy and global political instability - came down significantly (10-20%) over the past two years of surveys.

Emotions are a clear influence on respondents' investment decisions. This provides an opportunity for advisors to provide clients with facts on asset allocations, time horizons and portfolion diversification - empowering them to replace emotions with information when making retirement investing decisions.

Most respondents who own passive investments were unable to accurately define those investments. It seems they are choosing active and passive investments for many of the same reasons - consistent performance, diversification and low cost - believing the two provide many of the same perceived benefits.

More surprising, the new "long term" is less than seven years - at least for Millennial investors, who also continue to hold larger-than-expected cash allocations and fewer equities than older generations, trading growth potential for perceived safety.

Most clients have not had the family wealth conversation with their advisors. Considering that investor assets are not only known to leave an advisor's practice when passed on to heirs but disappear altogether by the end of the second generation1, it's critical that you create a relationship with the entire family and be the facilitator of these conversations.

1Indeed, Research March 8, 2013

METHODOLOGY MFS®, through Research Collaborative, an independent research firm, sponsored an online survey from July 21 to July 31, 2014, of 951 individual US investors with $100,000 or more in household investable assets and 623 licensed US financial advisors who have been licensed for at least three years with $500,000 or more in annual mutual fund sales. All investor respondents make or share in making financial decisions for their households. MFS was not identified as the sponsor of the survey. Gen Y investors are those under the age of 35; Gen X investors are those between the ages of 35 and 49; Baby Boomer investors are those between the ages of 50 and 68; Mature investors are those age 69 or older.
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