Consumers are also more likely to have alternative investments than index funds, a New York Life survey found.
Clients might have a different idea about what’s a core investment and what’s an alternative investment than financial professionals do.
New York Life found that 16% of U.S. adult investors surveyed in November reported having money invested in cryptocurrencies or similar types of alternative investments, up from 13% a year earlier, according to survey findings shared with ThinkAdvisor.
Crypto still ranks far behind individual stocks: 29% of survey participants said they had those.
But crypto ranked ahead of many other well-known investments. Roughly 15% said they had bonds; 12% had exchange-traded funds; 10% had index funds; 9% had income annuities; 6% had variable annuities; and 6% had fixed deferred annuities.
Only 41% of the 2,202 participants said they had retirement savings. About 44% answered the question about savings and investment asset allocation.
What it means: While officials in Washington are debating which kind of suitability, best interest or fiduciary standard should apply to rollovers of retirement assets into fixed annuities, savers say they are putting their funds into holdings stored in digital wallets, subject to whatever standards the crypto and wallet managers choose to follow.
The fine print: One challenge with interpreting consumer survey data is that the participants may not always remember what they have or understand what they have.
Consumers are far more likely to say they have long-term care insurance than to have it, for example, and it could be that some consumers put cash in products like indexed annuities inside defined contribution retirement plan accounts without understanding the terminology.
The mood: The consumers surveyed had mixed feelings about the world. About 36% described themselves as “stressed,” and 35% classified themselves as “hopeful.”
Financial shopping: The New York Life survey results suggest that financial professionals might have better luck with using keywords and marketing messages related to budgeting than to annuities.
About 19% of survey participants said they intended to use new budgeting or spending apps in the coming year.
Just 9% said they would open retirement accounts, and only 8% said they would buy products such as annuities or life insurance.
Advice needs: The New York Life survey team also found that 34% of participants admitted that they have no financial strategy and that 27% have a financial strategy that they like.
About 9% said they need help with creating a financial strategy, and 30% said they need help with improving an existing strategy.
Roughly 23% listed “being on track to retire at my desired age” as a long-term financial goal for 2024.
The trends: Donn Froshiesar, New York Life’s head of consumer insights, said most of the results seem similar to what the firm found when it conducted other recent consumer surveys.
“It’s fair to say adults were a little less likely to report using life insurance or an annuity to save money at the end of 2023 compared to the end of 2022,” Froshiesar said.
The New York Life Building. Credit: New York Life