1. society
2. work
3. retirement

2015 GLOBAL SURVEY OF INDIVIDUAL INVESTORS
INVESTOR INSIGHTS SERIES
CLOSE ENOUGH
ISN’T GOOD ENOUGH
Investor expectations and the
need for concrete financial plans
E XECUTIVE SUMMARY
Optimism or overconfidence?
In this, our fourth Global Survey of Individual Investors, 80% of respondents believe
they will do just as well this year, if not better than last year. Large numbers of the
7,0001 investors we spoke with in 17 countries say equity markets will be the year’s
top performers. But investor optimism may be leading to unrealistic expectations.
When asked, investors believe the average annual return they will need to achieve
their goals actually increased to 9.7% above inflation ­– almost a full point higher than
the 9% they anticipated in our 2014 survey.2
Conflicting views on returns and risk
Even after seeing positive results over the past three years, the number of investors
who say they are conflicted between pursuing returns and protecting capital increased
(73% in 2015, compared to 67% in 2013 3). The number of individuals who said they
would choose safety over performance also increased to 84%, up 6% from 2014.
Investors face a planning gap
Investors may be lacking basic tools that could help them resolve these conflicted
feelings. Among those surveyed, 57% said they have no financial goals, 67% have
no financial plans and 77% rely on gut instincts to make investment decisions. As
a result, many investors may be relying on broad return assumptions and emotional
measures of risk which could be detrimental to their success.
Retirement – one chance to get it right
Retirement is the Number One priority for investors worldwide. Yet, despite their
lack of plans, about two-thirds of investors (66%) claim to have a strong knowledge
of what they will need for income in retirement: 63% of pre-retirement income on
average, far short of the 75%–80% used in many planning scenarios.
Looking for alternatives
Individuals appear to recognize challenges presented by today’s markets, and are
open to new approaches. In fact, 69% say they believe a traditional stock and bond
portfolio is no longer enough to pursue returns and preserve capital. This may lead
to a discussion of some form of alternative investments, but investors want to know
more, and 76% say they would consider alternative investments if their advisor
recommended them.
Demand for a new level of advice
These challenges are leading investors to a new kind of advisory relationship – one
in which their advisor is more of a coach, helping to make more informed investment
decisions and educating them about investing and the markets.
With modern markets presenting more complex choices and complicated decisions,
investors seem to understand instinctually the need to get more information and advice
to help guide them.
1See page 6 for survey respondent breakdown.
2Natixis Global Asset Management, Global Survey of Individual Investors, May 2014. Survey included 5,950 investors in 14 countries.
3Natixis Global Asset Management, Global Survey of Individual Investors, July 2013. Survey included 5,650 investors in 14 countries.
2015 GLOBAL SURVEY OF INDIVIDUAL INVESTORS
3
TABLE OF CONTENTS
2015 Global Survey of Individual Investors
5
INTRODUCTION Close enough isn’t good enough
9
SECTION ONE Risk, return and the continuing conflict
13
SECTION TWO Getting real about retirement
17
SECTION THREE What are the alternatives?
21
CONCLUSION Refining goals and redefining advice
24
PROGRAM OVERVIEW Natixis Global Asset Management’s
Investor Insights Series
Underneath a positive facade, investors still struggle
with volatility, risk and the safety of their assets.
intro
INTRODUCTION
Close enough isn’t good enough
Investor expectations and the need for concrete financial plans
Individuals around the world are optimistic about their investment
prospects in 2015. But underneath a positive facade, investors still
struggle with volatility, risk and the safety of their assets and face
a significant planning gap that could leave them without the solid
footing needed to reconcile their desire for investment returns and
their lingering aversion to taking risk. What lies in the balance is
their ability to successfully meet retirement goals at a time when
they will need to shoulder a greater part of the burden.
Optimism?
With the U.S. in a six-year bull market run that produced a 13.7% return for the
S&P 5004 in 2014, and markets in Spain, Japan, and Singapore all delivering annual
returns above 8%, 80% of the 7,000 individuals we surveyed said they expect their
investment will perform just as well, if not better, in the year ahead. This may be
what fuels their convictions about stock markets around the world, with the largest
number of investors (34%) citing stocks or shares, whether in their home country or
abroad, as their prediction for 2015’s top-performing asset class.
Lacking a strong
understanding of investment
principles and concrete plans,
investors are left to make broad
assumptions about their goals
and expectations.
Or overconfidence?
Is this really optimism, or overconfidence? Certainly, with improving market
conditions around the globe, low interest rates, and low to no inflation, experts in
behavioral finance might say investor sentiment in 2015 reflects a recency bias,
and individuals who have experienced good results today may allow themselves to
assume that results will be just as good, if not better, tomorrow.
4The S&P 500 ® Index is a widely recognized measure of U.S. stock market performance. It is an unmanaged index of 500 common stocks chosen for market size, liquidity, and industry group
representation, among other factors. It also measures the performance of the large-cap segment of the U.S. equities market.
2015 GLOBAL SURVEY OF INDIVIDUAL INVESTORS
5
2015 Global Survey of Individual Investors
ABOUT THE SURVEY
Natixis Global Asset Management surveyed 7,000 individual investors globally in February 2015 with the goal of understanding their views
on the markets, investing and measuring their progress toward financial goals. Investors from the Americas, Asia, Europe, the Middle East and
Oceania are represented in the survey.
750
U.S.
250
500
750
France
U.K.
Canada
500
Germany
500
Italy
350
Switzerland
500
Spain
350
Mexico
250
Australia
200
Colombia
350
UAE
200
Chile
200
350
Argentina
Japan
500
Hong Kong
500
Singapore
7,000
total
respondents
PROJECT BACKGROUND AND METHODOLOGY
2015 marks the sixth year in which Natixis Global Asset Management has conducted its Individual Investor Survey in the U.S.,
and the fourth year it has conducted its global survey.
CoreData Research was commissioned by Natixis to conduct the study of investors in 17 countries in order to better understand their
attitudes toward portfolio construction, risk, advice, and saving, their market sentiments, and their perceptions on benchmarking investment
performance.
An online quantitative survey was developed and hosted by CoreData Research. A sample of 7,000 individual investors with a minimum
net worth of US$200,000 (or Purchase Price Parity [PPP] equivalent) was obtained for the purposes of this study. Results are analyzed with
segmentation from a range of perspectives.
6
2015 GLOBAL SURVEY OF INDIVIDUAL INVESTORS
INTRODUCTION
Perhaps an even stronger influence on investor outlook may be the political and
demographic realities that are shifting greater responsibility for retirement funding
onto the shoulders of individuals. Our study confirms that retirement is the Number
One priority for investors worldwide. To be successful in achieving this weighty goal,
investors may feel they have to be optimistic about their prospects of growing assets
to meet their goals. In fact, 69% of investors tell us that asset growth is increasingly
a priority, with 59% of the pre-Baby Boomer generation – those age 69 and above,
who have the most at risk in pursuing returns – saying it is their priority as well.
Investors may not actually view the world through rose-colored glasses. Their
true feelings and concerns come through in their attitudes about risk and return,
prospects for retirement, and increased interest in alternative investments. In
Investors may not actually
view the world through rosecolored glasses.
this, our fourth edition of the Natixis Global Asset Management Global Survey of
Individual Investors, we see three themes as defining the investor mindset:
• Return expectations must be grounded with clear goals and financial plans.
• Abstract notions of retirement must be met with concrete investment strategies.
• Demand for risk management and diversification must be met with enhanced education on alternative investments.
Investors are faced with many critical choices that will affect their financial future.
Lacking a strong understanding of investment principles and concrete plans, they
are left to make broad assumptions about their goals and expectations. But they
recognize the limitations of going it alone, and many believe professional advice is
intro
the right route forward.
One thing is clear: Now is the time to help investors set clear goals and plans, while
also enhancing their knowledge and understanding of markets, investments and
strategies to help them meet their goals.
INVESTORS EXPRESS OPTIMISM, BUT STILL HAVE DOUBTS
Large numbers expect this year's returns will be at least as good as last year's, if not better.
92%
90%
Chile
89%
89%
84%
83%
Australia
U.K.
75%
Germany
U.S.
Spain
74%
Japan
Mexico
87%
Canada
78%
Singapore
74%
Hong Kong
86%
86%
78%
76%
Colombia
Switzerland
68%
Argentina
UAE
Italy
68%
France
2015 GLOBAL SURVEY OF INDIVIDUAL INVESTORS
7
With the reality of greater self-reliance in funding
retirement hanging over investors worldwide,
reality cannot take a back seat to optimism.
SECTION ONE
Risk, return and the continuing conflict
one
Return
Risk
Investors should not be faulted for their optimism; after all, it can
be a helpful, if not necessary, view to maintain when considering
the future. It allows individuals to feel good about what they have
accomplished to date, and feel as though critical life goals, such
as retirement funding, are attainable in the long term.
After living through twenty years of asset bubbles, financial crisis, volatility and
uncertainty, investors should have this opportunity to take a breath and think about
what is possible, rather than worrying about what could possibly be the next crisis
to interrupt their investment plans.
But with the reality of greater self-reliance in funding retirement hanging over
One place where
investors may need to temper
their optimism is in their
expectations on investment
returns.
investors worldwide, reality cannot take a back seat to optimism. There is simply
too much riding on their success to rely on wishful thinking.
Great expectations
If there is one place where investors may need to temper their optimism, it is in their
expectations on investment returns. Globally, investors tell us they believe they will
need average returns of 9.7% above inflation in order to achieve their goals. Colombian
investors expressed the highest expectations at 12.2% above inflation, while Swiss
and German investors demonstrated the lowest at 8%. Based on a historic inflation
rate of about 3%, these expectations translate into real returns of between 11% and
15% over the long term – a rate of return that history shows is not sustainable.
2015 GLOBAL SURVEY OF INDIVIDUAL INVESTORS
9
SECTION ONE
As if to confirm that they may be treading close to the wishful, seven in ten
(72%) of the investors we spoke with say their return expectations are realistic.
Given an annualized return of 6.59% for the MSCI World Index5 over the past 25
years, it would seem that investors could be setting themselves up for a major
disappointment should they not be able to moderate expectations.
Based on their projections, one might also question whether, after a prolonged
one
period of low to negative levels of inflation throughout most of the developed world,
inflation even factors into the long-range investment plans of individual investors at all.
CONFLICTED BY RISK AND RETURN,
INVESTORS SIDE WITH SAFETY
I am sometimes
conflicted between
obtaining return and
preserving capital
If forced to
choose, I would
take safety over
performance
Risk attitudes out of alignment with return expectations
Risk may be the most significant factor tempering investor expectations worldwide.
Despite a positive outlook in 2015, and expectations for a high level of returns over
the long term, individuals worldwide still struggle to rationalize return expectations
with risk tolerances. In fact, the number of investors who report they are conflicted
between pursuing investment returns and preserving capital has increased by 6%
since 2013, with 73% expressing this opinion in 2015.
When it comes down to making a decision, however, investors worldwide are
abundantly clear in how they reconcile their feelings, with 84% stating that if they
were forced to choose, they would take safety over investment performance.
Volatility: a tangible risk
For many individuals, their strong aversion to loss is fueled by market volatility and
they express great concerns about its influence on their portfolios. More than six in
ten investors (65%) see volatility as a roadblock to achieving their goals. More than
seven in ten (72%) say they feel helpless in trying to protect their portfolio during
volatile times. Investors clearly recognize the sway these powerful feelings can hold
over them, and six in ten (60%) report that they struggle to avoid emotional decisions
when market shocks occur.
Overall, it would also seem that investors are beginning to recognize the negative
impact that emotional decisions can have on their investment performance. The
number of respondents who believe that they would stand a better chance of
achieving their goals if they stopped making emotional decisions has doubled over
last year’s study. But the number of investors who understand the need to make
more rational investment decisions is still less than four in ten (39%).
Getting back to basics
Investors may be feeling greater pressure in making decisions during periods of
volatility because they lack a fundamental grounding that would help them put
risk in perspective. Traditionally, that grounding is delivered through a financial plan
or investment policy statement which outlines explicitly not just what investors
are looking to accomplish, but how they will pursue their goals and how their
investments will be managed across market cycles.
5 The MSCI World Index captures large and mid-cap representation across 23 Developed Markets (DM) countries. With 1,610 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country. Date range: 2/1/1990-12/31/2014.
10
2015 GLOBAL SURVEY OF INDIVIDUAL INVESTORS
INDIVIDUALS MAY BE MISSING A FOUNDATION FOR INVESTMENT DECISIONS
of investors have not
set financial goals
are making decisions
on gut instinct
have no
financial plan
This is an area where we find that investors worldwide lack fundamental investing
tools that could help them keep volatility in perspective. When asked, 57% of those
we spoke with said they do not have clear financial goals and 67% said they do not
have a financial plan. Without these basic investment tools in place, individuals are
left to rely solely on their instincts. In fact, 77% of respondents globally said they rely
on gut instincts when making investment decisions. This is especially challenging
considering that just two out of ten investors claim that their investment knowledge
INDIVIDUALS MAY BE MISSING A FOUNDATION
is very strong.
FOR INVESTMENT DECISIONS
Ready to put goals first
Although lacking in concrete goals and specific financial plans, individuals still think
these tools can be valuable measures of investment success. More than seven in
ten (73%) say they are willing to set a target return that is independent of the market,
and almost the same number (75%) say they would be happy if they achieved their
goals but underperformed the market. When it comes down to it, 65% of investors
Just two out of ten
investors claim that their
investment knowledge is
very strong.
worldwide said they worry more about the risk of not achieving their goals than the
risk of not beating the benchmark.
One clear point of distinction may be the difference of opinion among age groups
within our study. Nearly six in ten (59%) of Millennial investors (ages 18–33) and
are making decisions
on gut instinct
54% of Generation X (ages 34–49) said they worry more about the risk of failing
have time
no horizon,
to beat the market than the risk of losing money. Given their longer
financial plan
of investors have not
these younger individuals have more time to make up for any potential losses in
set financial goals
their portfolio. Conversely, older investors are more sensitive to investment loss, and
only 36% of Baby Boomers (ages 50–68) and 34% of pre-Baby Boomer (age 69+)
generations said their concern with beating the market is greater.6
This more conservative view is directly in line with the financial concerns of individuals
who are either past retirement age or nearing it, and have little time to make up for past
losses. In looking closely at how our respondents feel about retirement, Millennials
and Generation X investors have much they can learn from investors in older age
groups who have experienced the irrational exuberance of a charging bull market
and the effects of a subsequent market collapse in both 2000 and 2008.
6 Of the 7,000 respondents, 2,247 are Millennials, 2,578 are Generation X, 1,968 are Baby Boomers and 207 are pre-Baby Boomers.
2015 GLOBAL SURVEY OF INDIVIDUAL INVESTORS
11
Two-thirds of investors worldwide believe it is
increasingly their responsibility to fund retirement.
two
SECTION T WO
Getting real about retirement
Employer
Government
Individual
Retirement is an abstract concept for many, especially younger
investors. Globally the financial industry has worked hard to paint
a positive picture as encouragement for saving and investing to
fund future financial needs. Images of seniors traveling the world,
playing golf, surfing, or waterskiing have helped form an idealized
view of what life in retirement can be.
These positive images may help initiate and encourage retirement savings, but given
the growing necessity for self-reliance in retirement funding, the emotional appeal
of financial and personal freedom may need to be balanced with a more pragmatic
consideration of how much individuals will need to save, how long it will need to last,
and what costs those funds will actually cover.
The pressure is on
The emotional appeal of
financial and personal freedom
may need to be balanced with a
more pragmatic consideration
of how much individuals will
need to save.
As demonstrated in the Natixis Global Asset Management 2015 Global Retirement
Index,7 retirement funding is under pressure globally. Shifting fiscal policies and
strained funding for social services are leading to decreased funding for government
programs. In the private sector the pressure to meet the liabilities presented by
increased lifespans is driving a trend to replace defined benefit plans with defined
contribution plans that put the onus of retirement funding on individual employees.
7 Analysis as of January 2015; provides insight into the environment for retirees in 150 countries based on 20 economic, regulatory and health factors. See page 25 for more details.
2015 GLOBAL SURVEY OF INDIVIDUAL INVESTORS
13
SECTION T WO
two
THREATS TO FINANCIAL SECURITY IN RETIREMENT
Asia &
The Pacific
Europe
Latin
America
Middle
East
North
America
Inflation
53%
43%
62%
47%
52%
Long-term care costs not
covered by insurance
49%
39%
45%
49%
48%
Health care costs not covered
by insurance
51%
36%
41%
52%
53%
Not saving enough
47%
33%
63%
40%
47%
My government pension won’t
cover enough of my costs*
40%
38%
43%
24%
27%
My government’s financial
situation
24%
33%
43%
23%
27%
Insufficient investment returns
34%
24%
37%
26%
38%
Financial support needed by
family members
20%
15%
32%
29%
16%
Insufficient sale proceeds
from primary residence
18%
17%
28%
25%
12%
* or government programs like Social Security
Investors around the world feel this pressure, with two-thirds of respondents
reporting they believe it is increasingly their responsibility to fund retirement. As one
would expect, the pressure is greatest for those who are closest to retirement age,
three
with three-quarters of Baby Boomers reporting they believe it is increasingly their
responsibility.
INVESTORS ARE UNCLEAR OF
RETIREMENT INCOME NEEDS
From abstract to concrete
Almost seven in ten (69%) of investors say retirement is their top financial goal,
and nearly the same number (66%) also report that they have a strong knowledge
of the annual income they will need to live comfortably in retirement. This may be
a case of going on gut in evaluating their savings and investment plans, since on
average, individuals say that they will need 63% of their pre-retirement income,
a number far short of the 75%–80% traditionally assumed for retirement plans.
In this case, individuals’ lack of clear goals and a solid financial plan may prevent
them from establishing a realistic view on retirement needs.
Even without a formal plan in place, investors readily identify key threats to
their retirement security: Among all investors inflation is the most commonly
cited threat to retirement success, with 49% of investors identifying this factor.
Yet we also see that investors may not be factoring this into their overall return
expectations. In essence, inflation is a force that is most likely to be viewed in only
absolute terms, such as the loss of purchasing power.
Percentage of pre-retirement
income individuals say they will
need, far short of the 75%–80%
traditionally assumed.
Again those closer to retirement have the strongest understanding of the impact
inflation can have on their income, with 56% of Baby Boomers citing it as a
threat. Beyond this economic force, long-term care costs (46%), healthcare costs
(44%), not saving enough (41%) and a government pension shortfall (36%) round
out the top five. All but one of these factors are out of the direct control of the
investor, making the case clear for increased savings and a focus on how these
assets are invested.
14
2015 GLOBAL SURVEY OF INDIVIDUAL INVESTORS
The wisdom that comes with age
Retirement is a milestone that represents one of the biggest financial changes
individuals may experience in a lifetime. Accumulation of assets is no longer the sole
singular focus, and many investors are challenged with drawing an income from
their portfolio. Segmenting the results from our survey by age suggests that there is
much to be learned by those who have retired and those who are nearing retirement
age. In the end, we get a better sense of the reality of retirement.
When asked at what age they would like to retire, younger investors are clearly
focused on early retirement: Millennials say age 58, while Generation X say 62.
When asked when they think they will actually retire, their aspirations moderate only
slightly at age 60 and age 63 respectively.
Asked the same questions, Baby Boomers say age 68 on both counts. Pre-Boomers
respond with 73 on both counts. In reality, for members of those generations who
are already retired, the day came much earlier at age 59 and 63 respectively.
This underscores a critical point of consideration in retirement planning. Those
who have retired may have done so because they have achieved financial success
earlier in life. But early retirement may not always be a reason to celebrate. Illness
or disability may force individuals to stop working, as can the need to care for a
family member. In many cases, a layoff in late career quickly becomes an unplanned
retirement. The lesson to be learned is that investors should set their sights on
maximizing retirement savings throughout life to ensure they build sufficiently to
Investors should set
their sights on maximizing
retirement savings to ensure
they build sufficient assets to
weather an unplanned or early
retirement.
weather an unplanned or early retirement.
three
Plan B for retirement income
Should they fall short on their retirement savings, investors have clear plans on how
they will make up the difference. The largest number (45%) say employment will
be the answer, followed by support from their spouse or significant other (36%),
government programs (35%), and family (23%).
Here is another case where it will be useful to consider the life experience of older
investors. Only 20% of pre-Boomers consider employment a Plan B for retirement
funding. The reasons can be many: individuals may not be physically able to work, they
may have family care obligations that prevent them from working, or finding gainful
employment may be harder to come by. The lesson to keep in mind is that no matter
how easy it may look in youth, it can be difficult to account for the challenges that life
may present as one ages.
AGE OF RETIREMENT: PERCEPTIONS VS. REALITY
73
68
58
60
62
73
At what age
do you want to retire?
68
63
63
59
At what age do you believe
you will actually retire?
At what age did you
actually retire?
Millennials
age 18–33
Generation X
age 34–49
Baby Boomers
age 50–68
Pre-Baby Boomers
age 69+
2015 GLOBAL SURVEY OF INDIVIDUAL INVESTORS
15
Almost seven in ten investors say traditional stock
and bond approaches are no longer enough to pursue
returns and manage risk in modern markets.
threeº
SECTION THREE
What are the alternatives?
Increased pressure to fund retirement, coupled with conflicted
sentiments about return expectations and risk tolerances, is
leading investors to consider new investment choices.
Knowing they will need to generate assets to cover them through
a retirement lasting 20 to 30 years or longer, investors are eager
to generate attractive investment returns. Yet after experiencing
significant investment losses in the past decade, they are averse
to risk and state they prefer safety over investment performance.
Traditional strategies challenged
Large numbers inherently recognize that they will need to take new measures to
balance these two competing forces in their portfolio. Almost seven in ten (69%)
say traditional stock and bond approaches are no longer enough to pursue returns
and manage risk in modern markets. Respondents in our 2014 Global Survey of
Institutional Investors8 express similar views. More than six in ten (62%) of the
decision makers we spoke with said institutions should go beyond traditional
diversification and portfolio construction techniques. More than seven in ten
Three-quarters of
institutional investors say
individuals should go beyond
traditional asset classes and
incorporate alternatives in
their portfolios.
(76%) say individuals should go beyond traditional asset classes and incorporate
alternatives in their portfolios.
While individuals worldwide see the need to incorporate a broader range of
investments in portfolio construction, they express reservations about these
new strategies and asset classes, and need help understanding how alternative
investments may fit into their investment plans.9
8Natixis Global Asset Management, Global Survey of Institutional Investors, December 2014. Survey included 642 institutional investors in 27 countries.
9Alternative investments involve specific risks that may be greater than those associated with traditional investments, and there is no assurance that any investment will meet its performance objectives or that losses will be avoided.
2015 GLOBAL SURVEY OF INDIVIDUAL INVESTORS
17
SECTION THREE
Time for a new conversation
Alternative investments have come to the fore of the investment industry in recent
years as asset managers, distributors, advisors and their clients have looked for
solutions to help address highly correlated markets and persistent volatility. But
the term “alternative investments” has become a catch basin for a wide array
of investments including hedge funds, long-short equity, private real estate and
commodities, among others, and herein lies the challenge for individual investors.
Three-quarters of
investors say that if their
advisor were to recommend
alternative investments,
they would consider them
for their portfolio.
We see significant differences in how individuals perceive their grasp of alternative
investments and how advisors see their clients’ understanding of the subject.
According to our survey, 47% of investors worldwide believe they understand
alternative investments very well and 50% claim that they already invest in
alternatives. The conviction around these sentiments was strongest among
Millennials (57% and 61% respectively) followed by Generation X investors (50%
and 53% respectively).
Yet advisors do not see the same level of understanding or acceptance among their
clients. In our 2014 Global Survey of Financial Advisors,10 conducted in September of
2014, 68% of advisors worldwide felt investors did not understand these strategies. In
fact, 24% of advisors themselves said they found alternatives too complicated to explain.
Digging deeper reveals that individuals may not be as sure of their convictions as
they report. Most telling may be the 52% of investors who say individuals do not
have access to alternative investments and the 67% who believe they are riskier than
traditional investments. Despite these inconsistencies, large numbers of individuals
(76%) say that if their advisor were to recommend alternative investments, they
would consider them for their portfolio.
three
A GENERATIONAL LOOK AT ALTERNATIVE USAGE
Millennials
age 18–33
I invest in alternative investments
Generation X
age 34–49
61%
I understand alternative investments well
57%
As an individual investor, I don't
have access to alternatives
55%
Alternatives are riskier than most
other investments
Most alternatives have high fees
I would need to learn more about
alternatives before I invest in them
If my advisor recommended alternatives,
I would consider them for my portfolio
Baby Boomers
age 50–68
53%
35%
50%
80%
75%
30%
48%
66%
67%
26%
35%
53%
66%
65%
42%
67%
63%
80%
76%
10 Natixis Global Asset Management, Global Survey of Financial Advisors, September 2014. Survey included 1,800 financial advisors in 10 countries.
18
2015 GLOBAL SURVEY OF INDIVIDUAL INVESTORS
Pre-Baby Boomers
age 69+
80%
75%
80%
76%
78%
74%
INVESTOR PORTFOLIO CONCERNS LEAD TO A
DISCUSSION OF ALTERNATIVE INVESTMENTS
of individuals said
they want strategies to
better help them balance
risk and return
of investors said they want
strategies that will enhance
portfolio diversification
of investors said they want
strategies that can help
insulate their portfolios
against volatile markets
Ask not just what they are, but what they’re intended to do
Recent innovations in the asset management industry have made alternative
investments more accessible to individual investors. With the rise in liquid
alternatives, improved access to non-correlated asset classes such as managed
futures, and the availability of ETF strategies focused on precious metals and other
commodities, investors and advisors now have more tools at their disposal for
portfolio construction.
While the discussion of any alternative investment must always begin with client
goals and risk tolerances, and provide a comprehensive view of the strategy or asset
class and the associated risks, it should also include the role that these investments
Eight in ten investors
want strategies to better help
them balance risk and return.
are intended to play within the portfolio overall. The investors we surveyed express a
clear desire for this type of information.
Of the 7,000 individuals we spoke with, 77% said they want strategies that are less
tied to the broad markets. Another 80% of individuals said they want strategies to
better help them balance risk and return, and more than three-quarters (76%) of
investors said they want strategies that will enhance portfolio diversification. More
than three-quarters of investors want strategies that can help insulate their portfolios
against volatile markets. Each is an area that may lead to a discussion of some form
of alternative investments.
The challenge for financial advisors is not just that of investment management but
also client communication. Knowing that 79% of individuals say they only invest in
products they understand and 80% say they would need to know about alternatives
more before investing, advisors will need to take on the role of educator and help
individuals see if, how, and when alternative investments should be implemented
within a client portfolio.
2015 GLOBAL SURVEY OF INDIVIDUAL INVESTORS
19
Nearly three-quarters of those we surveyed said
professional advice is increasingly necessary to manage
their investments and meet their retirement goals.
conclusion
CONCLUSION
Refining goals and redefining advice
Investing is a complicated proposition for individuals around the
world in 2015. A prolonged period of market upheaval has left
an indelible impression. Investors are challenged by risk and
volatility and say they value the safety of their assets over the
performance of their portfolio. But they are also conflicted.
With growing pressure to assume greater responsibility for
retirement funding, individuals are also feeling lofty aspirations
for investment returns.
Striking a better balance
Rationalizing these two competing forces is no easy task, yet our respondents
inherently understand the need to approach investing differently. They tell us they
want access to new strategies that will help them balance risk and reward, that will
help them better diversify their portfolios, and that go beyond the traditional stock
and bond portfolios.
Investors see the
advisory relationship as
a partnership that makes them
better equipped to stay on
track with their plans.
The biggest need: Advice
Beyond help with the selection of investments – both alternative and traditional –
they may need something more fundamental: advice.
2015 GLOBAL SURVEY OF INDIVIDUAL INVESTORS
21
CONCLUSION
In fact, nearly three-quarters (74%) of those we surveyed said professional advice is
increasingly necessary to manage their investments and meet their retirement goals.
It starts with helping investors establish clearly defined goals and a specific financial
plan for meeting them, and large numbers of investors (36%) cite help in this area
among their top needs from an advisor.
A new advisory relationship
Along with meeting these basic financial planning needs, investors see the advisory
relationship as a partnership that makes them better equipped to stay on track with
their plans over the long term. When asked what they want from their advisor, most
frequently individuals say they want help making informed investment decisions
(46%). Another 35% say they want their advisor to educate them on how to become
a better investor, and the same number say they want their advisor to provide an
education on how investments work.
conclusion
We think this is a critical opportunity to enhance traditional advisory models to meet
these needs. Recent moves to adopt goal-based investing practices open the door
to helping clients grow as investors. The next step forward will mean teaching them
about more durable ways to approach investing.
INVESTORS WITH ADVISORS REPORT A HIGHER LEVEL OF KNOWLEDGE ON KEY INVESTMENT GOALS11
Advised
Non-advised
Annual income needed to live
comfortably in retirement
72%
56%
65%
Investment strategies that
produce stable income
47%
Annualized return on
investments to reach my goals
46%
The impact of inflation
on my assets
46%
66%
64%
61%
Impact of taxes on
investment decisions
Investment strategies to
achieve steady returns through
bull and bear market cycles
Investment strategies that
hedge against inflation
Investment strategies that don't
correlate to the broad market
(alternative strategies)
11 4,112 respondents are advised, 2,888 are non-advised.
22
2015 GLOBAL SURVEY OF INDIVIDUAL INVESTORS
45%
56%
38%
55%
37%
50%
34%
FIVE TENETS OF
DURABLE PORTFOLIO CONSTRUCTION ®
Put risk first
Maximize
diversification
Use alternative
investments
Make smarter use
of traditional
asset classes
Be consistent
Toward more durable portfolios
In markets across the globe we have seen investors of all types challenged to meet
the competing priorities of generating returns through short-term market cycles and
funding long-term financial liabilities. In our view, meeting these modern market
challenges demands a more consistent investment framework.
We believe Durable Portfolio Construction® can make a difference to individuals,
advisors and institutions as they look to build portfolios that can help address
risk concerns while also pursuing long-term asset growth. Our tenets for Durable
Portfolio Construction include:
Put risk first – Risk profiles for some indexes have been relatively stable in recent
years, while returns have been widely varied. Targeting a consistent range of risk,
rather than a potential range of returns, may lead to more predictable results.
Maximize diversification – Considering the broadest possible range of asset
classes and investment strategies such as long and short exposures to equities,
fixed-income and commodities is one way to manage portfolio volatility.
Use alternatives – Alternative investments may help lower correlations, temper
volatility and offer new sources of return.
Make smarter use of traditional asset classes – Applying new, efficient ways
to capitalize on the long-term return potential of stocks and bonds can potentially
enhance long-term returns or reduce short-term risks.
Be consistent – Following a consistent investment philosophy is a critical first step
to ensuring portfolio durability, but equally important is establishing a consistent,
personal measure of investment performance to guide decisions and gauge progress.
2015 GLOBAL SURVEY OF INDIVIDUAL INVESTORS
23
PROGRAM OVERVIEW
About the Durable Portfolio Construction Research Center
Investing can be complicated: Event risk is greater and more frequent. Volatility is
persistent despite market gains. And investment products are more complex. These
factors and others weigh on the psyche of investors and shape their attitudes and
perceptions, which ultimately influence their investment decisions. Through the
Durable Portfolio Construction Research Center, Natixis Global Asset Management
conducts research with investors around the globe to gain an understanding of
their feelings about risk, their attitudes toward the markets, and their perceptions
of investing.
Research agenda
Our annual research program offers insights into the perceptions and motivations of
individuals, institutions and financial advisors around the globe and looks at financial,
economic and public policy factors that shape retirement globally with:
• Global Survey of Individual Investors – reaches out to 7,000 investors in
17 countries.
• Global Survey of Financial Advisors – reaches out to 1,800 advisors,
consultants and decision-makers in 10 countries.
• Global Survey of Institutional Investors – reaches out to more than 600
investors, consultants and decision-makers in 27 countries.
• Natixis Global Retirement Index – provides insight into the environment for
retirees in 150 countries based on 20 economic, regulatory and health factors.
The end result is a comprehensive look into the minds of investors – and the
challenges they face as they pursue long-term investment goals.
2014 INVESTOR INSIGHT SERIES
2015 GLOBAL SURVEY OF INDIVIDUAL INVESTORS
This communication is for information only. Analyses of the survey referenced herein are as of September 2014. There can
be no assurance that developments will transpire as may be forecasted in this material. This material may not be distributed, published, or reproduced, in whole or in part. Although Natixis Global Asset Management believes the information
provided in this material to be reliable, it does not guarantee the accuracy, adequacy or completeness of such information.
In the EU (ex UK)
Distributed by NGAM S.A., a Luxembourg management company authorized by the CSSF, or one of its branch offices.
NGAM S.A., 2 rue Jean Monnet, L-2180 Luxembourg, Grand Duchy of Luxembourg.
In the EU (ex UK)
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NGAM S.A., 2 rue Jean Monnet, L-2180 Luxembourg, Grand Duchy of Luxembourg.
In Switzerland
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In Switzerland
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In the UK
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In the UK
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In the DIFC
Distributed in and from the DIFC financial district to Professional Clients only by NGAM Middle East, a branch of NGAM
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In Japan
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(kinsho) No. 425. Content of Business: The Company conducts discretionary asset management business and investment
advisory and agency business as a Financial Instruments Business Operator. Registered address: 2-2-3 Uchisaiwaicho,
Chiyoda- ku, Tokyo.
In Japan
Provided by Natixis Asset Management Japan Co., Registration No.: Director-General of the Kanto Local Financial Bureau
(kinsho) No. 425. Content of Business: The Company conducts discretionary asset management business and investment
advisory and agency business as a Financial Instruments Business Operator. Registered address: 2-2-3 Uchisaiwaicho,
Chiyoda- ku, Tokyo.
In Hong Kong
This document is issued by NGAM Hong Kong Limited and is provided solely for general information only and does not
constitute a solicitation to buy or an offer to sell any financial products or services. Certain information included in this
material is based on information obtained from other sources considered reliable. However, NGAM Hong Kong Limited
does not guarantee the accuracy of such information.
In Hong Kong
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constitute a solicitation to buy or an offer to sell any financial products or services. Certain information included in this
material is based on information obtained from other sources considered reliable. However, NGAM Hong Kong Limited
does not guarantee the accuracy of such information.
In Latin America
This material is provided by NGAM S.A.
In Latin America
This material is provided by NGAM S.A.
The above referenced entities are business development units of Natixis Global Asset Management, the holding company
of a diverse line-up of specialized investment management and distribution entities worldwide. The investment management subsidiaries of Natixis Global Asset Management conduct any regulated activities only in and from the jurisdictions
in which they are licensed or authorized. Their services and the products they manage are not available to all investors in
all jurisdictions.
The above referenced entities are business development units of Natixis Global Asset Management, the holding company
of a diverse line-up of specialized investment management and distribution entities worldwide. The investment management subsidiaries of Natixis Global Asset Management conduct any regulated activities only in and from the jurisdictions
in which they are licensed or authorized. Their services and the products they manage are not available to all investors in
all jurisdictions.
In Mexico
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performance of any regulated financial activities. Any products, services or investments referred to herein are rendered or
offered in a jurisdiction other than Mexico. In order to request the products or services mentioned in these materials it will
be necessary to contact Natixis Global Asset Management outside Mexican territory. NGAM Mexico, S. de R.L. de C.V. is
a business development unit of Natixis Global Asset Management, a subsidiary of Natixis that is the holding company of a
diverse line-up of specialized investment management and distribution entities worldwide.
In Mexico
This material is provided by NGAM Mexico, S. de R.L. de C.V., which is not a regulated financial entity or an investment
advisor and is not regulated by the Comisión Nacional Bancaria y de Valores or any other Mexican authority. Registered
address: NGAM México, S. de R.L. de C.V., Torre Magenta, Piso 17, Paseo de la Reforma 284, Colonia Juárez 06600,
México D.F., México. This material should not be considered investment advice of any type and does not represent the
performance of any regulated financial activities. Any products, services or investments referred to herein are rendered or
offered in a jurisdiction other than Mexico. In order to request the products or services mentioned in these materials it will
be necessary to contact Natixis Global Asset Management outside Mexican territory. NGAM Mexico, S. de R.L. de C.V. is
a business development unit of Natixis Global Asset Management, a subsidiary of Natixis that is the holding company of a
diverse line-up of specialized investment management and distribution entities worldwide.
In Canada
NGAM Distribution, L.P. (“NGAM Distribution”), with its principal office located in Boston, MA, is not registered in
Canada and any dealings with prospective clients or clients in Canada are in reliance upon an exemption from the dealer
registration requirement in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant
Obligations. There may be difficulty enforcing legal rights against NGAM Distribution because it is resident outside of
Canada and all or substantially all of its assets may be situated outside of Canada. The agent for service of process in
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SW, Calgary, Alberta T2P 0R3. The agent for service of process in British Columbia is Borden Ladner Gervais LLP (Jason
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ON M5H 3Y4. The agent for service of process in Quebec is Borden Ladner Gervais LLP (Christian Faribault), located at
1000 de La Gauchetiere St. W, Suite 900, Montreal, QC H3B 5H4.
In Canada
NGAM Distribution, L.P. (“NGAM Distribution”), with its principal office located in Boston, MA, is not registered in
Canada and any dealings with prospective clients or clients in Canada are in reliance upon an exemption from the dealer
registration requirement in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant
Obligations. There may be difficulty enforcing legal rights against NGAM Distribution because it is resident outside of
Canada and all or substantially all of its assets may be situated outside of Canada. The agent for service of process in
Alberta is Borden Ladner Gervais LLP (Jonathan Doll), located at Centennial Place, East Tower, 1900, 520 - 3rd Avenue
SW, Calgary, Alberta T2P 0R3. The agent for service of process in British Columbia is Borden Ladner Gervais LLP (Jason
Brooks), located at 1200 Waterfront Centre, 200 Burrard Street, P.O. Box 48600, Vancouver, BC V7X 1T2. The agent for
service of process in Ontario is Borden Ladner Gervais LLP (John E. Hall), located at Scotia Plaza, 40 King St. W, Toronto,
ON M5H 3Y4. The agent for service of process in Quebec is Borden Ladner Gervais LLP (Christian Faribault), located at
1000 de La Gauchetiere St. W, Suite 900, Montreal, QC H3B 5H4.
CLOSE ENOUGH
ISN’T GOOD ENOUGH
GETTING TO
THE GOAL
Investor expectations and the need
for concrete financial plans
Markets, emotions and the risks
advisors must manage
In the United States
Furnished by NGAM Distribution, L.P., 399 Boylston St., Boston, MA 02116.
In the United States
Furnished by NGAM Distribution, L.P., 399 Boylston St., Boston, MA 02116.
Natixis Global Asset Management consists of Natixis Global Asset Management, S.A., NGAM Distribution, L.P., NGAM
Advisors, L.P., NGAM S.A., and NGAM S.A.’s business development units across the globe, each of which is an affiliate
of Natixis Global Asset Management, S.A. The affiliated investment managers and distribution companies are each an
affiliate of Natixis Global Asset Management, S.A.
ngam.natixis.com
Copyright © 2014 NGAM Advisors, L.P. – All rights reserved.
NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE
Natixis Global Asset Management consists of Natixis Global Asset Management, S.A., NGAM Distribution, L.P., NGAM
Advisors, L.P., NGAM S.A., and NGAM S.A.’s business development units across the globe, each of which is an affiliate
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ngam.natixis.com
This material should not be considered investment advice nor a solicitation to buy or an offer to sell any product or service
to any person in any jurisdiction where such activity would be unlawful.
24
2014 INVESTOR INSIGHT SERIES
This communication is for information only. Analyses of the survey referenced herein are as of September 2014. There can
be no assurance that developments will transpire as may be forecasted in this material. This material may not be distributed, published, or reproduced, in whole or in part. Although Natixis Global Asset Management believes the information
provided in this material to be reliable, it does not guarantee the accuracy, adequacy or completeness of such information.
This material should not be considered investment advice nor a solicitation to buy or an offer to sell any product or service
to any person in any jurisdiction where such activity would be unlawful.
Copyright © 2014 NGAM Advisors, L.P. – All rights reserved.
1020542
WP102-0914
1068548.1.1
NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE
2015 GLOBAL SURVEY OF INDIVIDUAL INVESTORS
WP110-1214
2015
GLOBAL
RETIREMENT INDEX
An in-depth assessment of welfare
in retirement around the world
UNDER PRESSURE
Facing up to the challenge of
balancing short-term performance
needs with long-term liabilities
About the surveys referenced in this paper
2014 Global Survey of Institutional Investors – Natixis Global Asset Management
commissioned CoreData Research to conduct a global study of institutional investors,
with the aim of gaining insight as to how they are managing investments and meeting
various challenges in today’s world.
Interviews were conducted throughout October and November 2014. Globally, the
study involved 642 decision-makers working in institutional investment who collectively
manage $31 trillion in assets in 27 countries across six geographical regions.
2014 Global Survey of Financial Advisors – Natixis Global Asset Management
commissioned CoreData Research to conduct an international study of financial
advisors, with the aim of better understanding the contemporary attitudes and needs
of this key collective of individuals to the financial services industry.
Data was gathered over a five-week period spanning June and July 2014. The survey
was delivered through an online quantitative survey of approximately 40 questions
and was hosted by CoreData Research. Globally, the study involved 1,800 financial
advisors in ten countries and across four continents.
2015 Global Retirement Index – Natixis Global Asset Management and CoreData
Research produce the Global Retirement Index Report, an international comparison
tool with the objective of providing a global benchmark for retirees and future retirees
to evaluate the suitability of nations in meeting retirement needs and expectations.
Analyses and rankings are as of January 2015. The Index provides insight into the
environment for retirees in 150 countries based on 20 economic, regulatory and
health factors.
Building more durable portfolios
Natixis Global Asset Management is committed to helping investors and advisors
build better portfolios that stand up to the challenges of modern markets.
To learn more about our Durable Portfolio Construction® philosophy, visit
durableportfolios.com.
2015 GLOBAL SURVEY OF INDIVIDUAL INVESTORS
25
This communication is for information only. Analyses of the survey referenced
herein are as of February 2015. There can be no assurance that developments
will transpire as may be forecasted in this material. This material may not be
distributed, published, or reproduced, in whole or in part.
In Australia: This document is issued by NGAM Australia Limited (“NGAM
AUST”) (ABN 60 088 786 289) (AFSL No. 246830) and is intended for the
general information of financial advisers and wholesale clients only and
does not constitute any offer or solicitation to buy or sell securities and
no investment advice or recommendation. Investment involves risks. This
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In the E.U. (outside of the U.K.): This material is provided by NGAM S.A.
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In Hong Kong: This document is issued by NGAM Hong Kong Limited and
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solicitation to buy or an offer to sell any financial products or services. Certain
information included in this material is based on information obtained from
other sources considered reliable. However, NGAM Hong Kong Limited does
not guarantee the accuracy of such information. This document has not been
reviewed or approved by the Securities and Futures Commission (“SFC”).
In Latin America (outside Mexico and Uruguay): This material is provided
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In Mexico: This material is provided by NGAM Mexico, S. de R.L. de C.V.,
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not regulated by the Comisión Nacional Bancaria y de Valores or any other
Mexican authority. This material should not be considered investment advice
of any type and does not represent the performance of any regulated financial
activities. Any products, services or investments referred to herein are
rendered or offered in a jurisdiction other than Mexico. In order to request
the products or services mentioned in these materials it will be necessary to
contact Natixis Global Asset Management outside Mexican territory.
In Canada: NGAM Distribution, L.P. (“NGAM Distribution”), with its principal
office located in Boston, MA, is not registered in Canada and any dealings with
prospective clients or clients in Canada are in reliance upon an exemption from
the dealer registration requirement in National Instrument 31-103 Registration
Requirements, Exemptions and Ongoing Registrant Obligations. There may
be difficulty enforcing legal rights against NGAM Distribution because it is
resident outside of Canada and all or substantially all of its assets may be
situated outside of Canada. The agent for service of process in Alberta is
Borden Ladner Gervais LLP (Jonathan Doll), located at Centennial Place, East
Tower, 1900, 520 - 3rd Avenue SW, Calgary, Alberta T2P 0R3. The agent for
service of process in British Columbia is Borden Ladner Gervais LLP (Jason
Brooks), located at 1200 Waterfront Centre, 200 Burrard Street, P.O. Box
48600, Vancouver, BC V7X 1T2. The agent for service of process in Ontario
is Borden Ladner Gervais LLP (John E. Hall), located at Scotia Plaza, 40 King
St. W, Toronto, ON M5H 3Y4. The agent for service of process in Quebec
is Borden Ladner Gervais LLP (Christian Faribault), located at 1000 de La
Gauchetiere St. W, Suite 900, Montreal, QC H3B 5H4.
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registration No. 199801044D) and holds a Capital Markets Services Licence
to provide investment management services in Singapore. Address of NGAM
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049315. Hotline No: 63099649.
The above referenced entities are business development units of Natixis
Global Asset Management, the holding company of a diverse line-up of
specialized investment management and distribution entities worldwide. The
investment management subsidiaries of Natixis Global Asset Management
conduct any regulated activities only in and from the jurisdictions in which they
are licensed or authorized. Their services and the products they manage are
not available to all investors in all jurisdictions. It is the responsibility of each
investment service provider to ensure that the offering or sale of fund shares
or third party investment services to its clients complies with the relevant
national law.
In Taiwan: This material is provided by NGAM Securities Investment
Consulting (Taipei) Co., Ltd., a Securities Investment Consulting Enterprise,
regulated by the Taiwan Financial Supervisory Commission. Registered
address: 16F-1, No. 76, Section 2, Tun Hwa South Road, Taipei, Taiwan, Da-An
District, 106 (Ruentex Financial Building I), R.O.C., license number 2012 FSC
SICE No. 039, Tel. +886 2 2784 5777.
Natixis Global Asset Management consists of Natixis Global Asset
Management, S.A., NGAM Distribution, L.P., NGAM Advisors, L.P., NGAM
S.A., and NGAM S.A.’s business development units across the globe, each of
which is an affiliate of Natixis Global Asset Management, S.A. The affiliated
investment managers and distribution companies are each an affiliate of
Natixis Global Asset Management, S.A.
In Japan: Provided by Natixis Asset Management Japan Co., Registration
No.: Director-General of the Kanto Local Financial Bureau (kinsho) No. 425.
Content of Business: The Company conducts discretionary asset management
business and investment advisory and agency business as a Financial
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