Ameriprise Study: Americans Avoiding Risk, Sometimes to Their Own Detriment
November 04 2015 - 7:00AM
Business Wire
New survey finds investors’ efforts to
sidestep risk may leave them susceptible to other financial
mistakes
Ameriprise Financial (NYSE: AMP), today unveiled new research on
how U.S. investors perceive financial risk and how those feelings
shape investment decision-making. The Financial Risks &
Investor Attitudes study uncovered that a vast majority of
respondents (73%) tend to avoid risk entirely or weigh risk very
carefully when engaging in financial decisions. With the recent
market volatility as a backdrop, these respondents admit that by
taking a more proactive role in their financial education and
investing strategies, they could better understand and embrace a
level of financial risk that could potentially benefit their
portfolios.
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“Investing for the long-term, while also trying to navigate
market swings, is one of the biggest challenges facing investors,”
says Marcy Keckler, vice president of Financial Advice Strategy at
Ameriprise. “Whether you are an experienced investor or beginning
to build your retirement nest egg, having a comprehensive financial
plan and understanding how risk factors into your plan can help
build financial confidence.”
The Financial Risks & Investor Attitudes study surveyed
3,000 Americans between the ages of 25-70. Respondents ranged from
millennials with at least $25,000 in investable assets to Gen Xers
and baby boomers with at least $100,000 in investable assets. The
findings uncovered four unique profiles within financial
risk—ranging from those who dodge risk at all costs, to those who
fully embrace risky decisions.
Exploring Financial
Risk:
Risk Avoider (31% of investors surveyed)At one end of the
investor risk spectrum are Risk Avoiders, who are the most guarded
when it comes to financial risk-taking, with 89% of this group
viewing their outlook on risk as “cautious.” While nearly half
(42%) of respondents in this profile claim they are not willing to
take risks with their finances, many are increasing their exposure
to risk unknowingly. The study found many people in this group
report being underinsured, only make investments with guaranteed
returns, and some are storing their savings in cash. This group is
also less likely to conduct the research necessary to help mitigate
risk. The majority of Risk Avoiders are baby boomers and female
(61%).
Risk Mitigator (42% of investors surveyed)Risk Mitigators
are careful about risk but less so than Risk Avoiders. Investors in
this profile characterize themselves as willing to take risks after
significant research (89%), but also associate risk with loss or
uncertainty in their investment outlook. Risk Mitigators are more
engaged in actions such as diversifying investments and being
sufficiently covered by health and life insurance. However, they
remain uncertain about their approach to investing and risk. Risk
Mitigators prefer low-risk investments and shift to conservative
choices during periods of market volatility – decisions that may
not always be in their best interest. Demographics in this group
are fairly evenly split between millennials, Gen X, baby boomers,
and gender.
Risk Manager (25% of investors surveyed)Risk Managers
have a more confident view of risk, with all of these individuals
(100%) associating financial risk as an opportunity. Consumers who
fit this profile are willing to take informed risks after
conducting research and focus on growing their retirement savings
through investing. They pursue well-thought-out risk mitigation
strategies, such as assessing financial decisions along with
diversifying and balancing investments. Nearly half (45%) of Risk
Managers invest heavily in the stock market and the majority report
understanding the details of their 401(k) plans. Risk Managers are
predominately male (61%) and are represented equally across the
three generations surveyed.
Risk Embracer (3% of investors surveyed)At the other end
of the spectrum, Risk Embracers are highly motivated investors,
many of whom associate financial risk with “excitement” (39%). A
majority of investors (64%) in this profile characterize themselves
as “real risk seekers,” with 76% indicating that they are willing
to make high risk and high return investments. This group also
admits they are more willing than their peers to take risks in
other areas of life such as borrowing too much when buying a house,
or making a career change with less financial security. While 53%
of respondents in this group consider themselves knowledgeable
about investing, they are primarily focused on growing their
investments versus employing mitigation strategies to protect
assets. The majority of Risk Embracers tend to be millennials (56%)
and male (67%).
“Evaluating and managing risk is a balancing act, and it’s
complex,” says Keckler. “Working with a financial advisor who can
help you identify and appropriately manage risk makes sense
regardless of your level of investment experience.”
For more information about the Financial Risk & Investor
Attitudes study, please visit our research page at
ameriprise.com/financialriskstudy.
About the surveyThe Financial Risks & Investor
Attitudes study was created by Ameriprise Financial utilizing
survey responses from 3,000 Americans ages 25 to 70 with at least
$25,000 in investable assets. The online survey was commissioned by
Ameriprise Financial, Inc., and conducted by Artemis Strategy Group
from June 16 – July 3.
About Artemis Strategy GroupArtemis Strategy Group
(www.Artemissg.com) is a communications strategy research firm
specializing in brand positioning, thought leadership and policy
issues.
About Ameriprise FinancialAt Ameriprise Financial, we
have been helping people feel confident about their financial
future for more than 120 years. With extensive asset management,
advisory and insurance capabilities and a nationwide network of
approximately 10,000 financial advisors, we have the strength and
expertise to serve the full range of individual and institutional
investors' financial needs. For more information, or to find an
Ameriprise financial advisor, visit ameriprise.com.
For further information and detail about the Financial Risks
& Investor Attitudes study including verification of data that
may not be published as part of this report, please contact
Ameriprise Financial.
Ameriprise Financial Services, Inc. Member FINRA and SIPC.
Investment advisory products and services are made available
through Ameriprise Financial Services, Inc., a registered
investment adviser.
© 2015 Ameriprise Financial, Inc. All rights reserved.
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Ameriprise Financial, Inc.Jennifer Johnson, 612-671-7188Media
RelationsJennifer.3.Johnson@ampf.com
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