Boston (Aug. 27, 2003) -- Three years of a sagging economy, rising unemployment and declining stock prices have left consumers more risk averse, focusing more on protecting their assets and families than building wealth, according to a survey of 600 financial decision-makers for John Hancock Financial Services.

When asked their opinions compared to a couple of years ago, 76 percent of financial decision-makers described themselves as more conservative investors and 73 percent said they are less likely to invest in financial products that run the risk of losing money.

Nearly two-thirds are more focused on asset protection, as opposed to growth, and 66 percent are more likely to invest in financial products with guaranteed rates of return than products with variable returns based on the stock market.

Respondents are also more likely to consider purchasing conservative and protection-focused products such as fixed-rate annuities (71 percent more likely to purchase), whole and term life insurance (60 percent and 59 percent more likely to purchase, respectively), and long-term care insurance (53 percent). Nearly three-quarters (72 percent) said they will continue to invest in products with guaranteed rates of return even once the economy recovers.

Roughly three-quarters said when choosing financial services companies, it’s more important than ever to choose companies that are known for safer investment products (74 percent), expertise in products with guaranteed rates of return (71 percent), and conservative investment strategies (60 percent).

Boomers emerged as even more conservative in their approach to financial decision-making. About three-quarters of Boomers describe themselves as more conservative investors today (78 percent versus 65 percent of younger consumers) and say they are less likely to invest in products that run the risk of losing money (75 percent versus 67 percent). More than two-thirds of Boomers are more likely to invest in products that offer guaranteed returns rather than variable returns (67 percent versus 63 percent of younger consumers), the survey found.

-- WebCPA staff

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