US Investors Expect Double Return on Advisor Projects

Financial Advisors

U.S. investors believe their portfolios are set to yield more than double what financial advisers believe is realistic, new survey finds rice field.

important point

  • Investors expect annual returns of 15.6%, more than double the 7% advised by financial experts.
  • The gap between advisor and investor expectations for Americans is more than double the global average.
  • Investors are ignoring the decline in 2022, with 59% saying they are willing to take more risk and 44% saying they are taking too much risk.

A 2023 study of retail investors by Natixis Investment Managers found that U.S. investors could return 15.6% on their investments over the long term, well above the 7% expected by financial advisors. It became clear that they believed they could be expected and did not set realistic expectations.

American investment return expectations not only exceed the advice of financial experts, they also exceed the global average. Globally, investors set expectations 42% higher than those of financial advisors, while Americans set their expectations 123% higher than what advisors say is realistic, according to an international survey. It turned out that there is

On the other hand, we have not adjusted our risk levels to respond to changes in circumstances that are likely to result from rising interest rates.

Shrinking returns, but still high risk

From 2012 to 2021, the S&P 500 delivered an average annual return of 16.5% until the market closes at a loss in 2022. In fact, 86% of his respondents said 2022 will be the year of ‘alarm bells’. But investors haven’t adjusted their risk tolerance, with 59% saying they’re okay with taking on more risk and 44% admitting they’re taking more risk than they should.


In the survey, Dave Gussell, director of the Natixis Center for Investor Insights, said, “The economy is moving from low inflation, low interest rates, and low volatility to high inflation, rising interest rates, and higher volatility. there is,” he said. “The market promises slower growth and more risk, but investors are not meaningfully adjusting their return assumptions or reassessing where the real risks lie,” he said.

Investors misunderstand interest rates and risk

One of the concerns highlighted by the survey was that investors seemed ignorant of the current economic climate. Fifty-six percent of respondents said they understood the impact of rising interest rates on bonds, but when asked, they generally said that current bond values ​​would fall while future income potential would increase. Only 3% answered correctly. The most common answer was “I don’t know” at 37%.

Investors have a different view of risk than their financial advisors and don’t have goals in mind, the study found. Only 9% defined risk as not meeting their financial targets, but three times as many of his financial advisors said so. When asked about exposure to market volatility, 29% of investors said how risk should be defined, followed by 23% who defined risk as asset loss and 18% who defined risk as market benchmarks. He replied that it meant underperforming.

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