In markets plagued by volatility and uncertainty, the prior experience with financial crises that many advisors have can be a huge boon for investors. Advisors, from their experience, can help guide investors to the assets that are best-suited to help mitigate risk in fluctuating markets.
Nationwide has found that approximately 70% of financial professionals feel confident that they can assist their clients in protecting their assets in the next financial crisis, while only 40% of investors feel that they can navigate successfully themselves, writes Eric Henderson, president of Nationwide Financial’s business branch, in a blog post.
This finding highlights the impacts that a financial advisor can have; a recent Advisor Authority study from Nationwide reported that more than six out of 10 investors are currently working with a financial professional (63%), and most investors are looking to their advisors for guidance as markets continue to be frothy.
Investors continue to be concerned about inflation and the impacts of Fed tightening, with almost 70% reporting in a Nationwide study that they are concerned about a recession within the next 12 months. The reduction in buying power due to inflation is also being felt heavily by investors, with 56% reporting that they believe inflation to be long-term.
“To guard against market risk and volatility, financial professionals tend to rely on strategies that can help manage the impact of market fluctuations. Diversification, fixed annuities and fixed indexed annuities topped the list of most commonly used solutions to control market risk,” writes Henderson.
This crunch is being felt particularly within retirement planning and income, as bonds continue to be heavily impacted by inflation and increasing tightening by the Fed. Many households have put off saving for retirement, have withdrawn from their retirement during the pandemic, or have delayed retirement plans. Financial advisors can help clients to get back on track and set new, realistic goals for current markets and financial situations.
“To help protect clients from longevity risk, or the risk of outliving their assets, the most common strategies financial professionals turn to include Social Security, dividend yield stocks and variable annuities,” explains Henderson.
For advisors looking for retirement income options for their clients, Nationwide a variety of actively managed ETFs for advisors that cater to a range of investment exposures and strategies within the major indexes.
For more news, information, and strategy, visit the Retirement Income Channel.