WAYNE, Pa.--(BUSINESS WIRE)--Hartford Funds today released new data revealing that investors plan to make investment changes based on the outcome of the 2020 Presidential Election. The findings also suggest a generational disparity on both investment decisions and the financial professional/client relationship, as younger investors (ages 18-44) and older investors (ages 45 and up) hold mixed views on which outcome will be better for their portfolios and the importance of political alignment with their financial professionals.
Most Investors Believe Presidents Influence Market Performance
An overwhelming majority of investors believe that the Presidential election will impact the stock market (93 percent) and their investing habits (84 percent) in one way or another. Leading up to the election, less than half of investors (45 percent) plan to make changes to their investments. 62 percent of investors, however, plan to make investment changes within 12 months following the election, indicating that the election result is likely to influence their investing decisions. What’s more, investors who have worked or currently work with a financial professional are more likely to make investment changes following the election outcome, while those who never worked with a financial professional are less likely to make changes (53 percent and 79 percent, respectively).
Among investors who believe that Presidents influence stock market performance, less than half (48 percent) believe Presidents influence performance a lot and 46 percent believe the influence is little. Investors who have worked or currently work with a financial professional are more likely to say that Presidents influence performance by a lot than those who have never worked with one (51 percent and 37 percent, respectively).
“History suggests that market performance is impartial to who is sitting in the Oval Office,” says Brian Kraus, Head of Investment Consulting at Hartford Funds. “As November approaches and investors and their financial professionals are actively evaluating their portfolios, we believe that focusing on clients’ long-term objectives, rather than the dynamics of election outcomes, will yield better results for investors’ portfolios.”
In the context of investment performance, investors generally believe that a Republican President is better for their investments compared to a Democrat (47 percent and 37 percent, respectively). This view, however, differs among generations. Younger generations believe a Democrat win will be better for their investments (46 percent), while older generations lean towards a Republican victory (49 percent). Less than one fifth (16 percent) of investors believe that the election outcome will not affect their investments.
Political Alignment Increasingly Important for the Financial Professional/Client Relationship
The data suggests that political views also play a key role in the financial professional/client relationship. 75 percent of investors say they discuss politics with their financial professional, and more than half believe it is important that they align on political views (57 percent). In fact, 44 percent say they would switch financial professionals if they did not align on political views, indicating that political alignment is becoming an important factor when selecting and retaining a financial professional.
The data also suggests generational differences on the importance of political alignment in the financial professional/client relationship. Younger generations almost unanimously (91 percent) say that aligning on political views with their financial professional is very or somewhat important, compared to the older generations (48 percent). Additionally, the majority of younger investors (83 percent) say that they discuss politics with their financial professional, and 68 percent of this same group say they would consider switching financial professionals if their political views do not align with those of their financial professional. However, less than half (38 percent) of older investors say that they discuss politics with their financial professional, and only 27 percent would consider switching if they did not align on political views.
“Now more than ever, investors—especially those of the younger generations—are looking to connect with their financial professionals for insights and expertise above and beyond financial guidance,” says John Diehl, Senior Vice President of Applied Insights at Hartford Funds. “As financial professionals begin to bring in the next generation of clients, they should be prepared to engage in conversations about topics that might not have historically fallen within their purview. These outside-of-the-box discussions, if done correctly, can uncover further details on what clients’ value, their investing habits and ultimately help foster a strong, effective relationship.”
For more information, please visit our Election Survey Resource Center.
The survey of 872 investors with at least $100,000 in investible assets was conducted online by Engine’s CARAVAN® between August 5 to August 9, 2020.
About Hartford Funds
Founded in 1996, Hartford Funds is a leading asset manager, which provides mutual funds, ETFs, and 529 college savings plans. Using its human-centric investing approach, Hartford Funds creates strategies and tools designed to address the needs and wants of investors. Leveraging partnerships with leading experts, Hartford Funds delivers insight into the latest demographic trends and investor behavior.
The firm’s line-up includes more than 50 mutual funds in a variety of styles and asset classes, as well as a variety of multifactor and active ETFs. Its mutual funds (with the exception of certain fund of funds) are sub-advised by Wellington Management or Schroder Investment Management North America Inc. The strategic beta ETFs offered by Hartford Funds are designed to help address investors’ evolving needs by leveraging a unique risk-optimized approach, which identifies risks within each asset class and then deliberately and systematically re-allocates capital toward risks more likely to enhance return potential. Excluding affiliated funds of funds, as of June 30, 2020, Hartford Funds Management Company, LLC and its wholly owned subsidiary, Lattice Strategies LLC, had approximately $117.8 billion in discretionary and non-discretionary assets under management. For more information about our investment family, visit http://www.hartfordfunds.com.
Some of the statements in this release may be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. We caution investors that these forward-looking statements are not guarantees of future performance, and actual results may differ materially. Investors should consider the important risks and uncertainties that may cause actual results to differ. These important risks and uncertainties include those discussed in The Hartford’s Quarterly Reports on Form 10-Q, our 2019 Annual Report on Form 10-K and the other filings The Hartford makes with the Securities and Exchange Commission. We assume no obligation to update this release, which speaks as of the date issued.
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