Communication Breakdown Between Advisors, Younger Clients Needs Careful Treatment, MFS Says


Despite the rise of the retail investment media -- not to mention years of sometimes systematic client communication -- MFS found that advisors have yet to communicate their take on the markets in a way that sinks in with retail investors.


Most advisors like international stocks, for example, but this sentiment has only filtered out to 35% of the investors the mutual fund firm interviewed.


A lot of the discrepancies seem to originate in the advisors' wishful thinking or outright failure to really understand what's going on in their clients' heads. Most notably, 75% of the advisors thought investors have gotten more comfortable with risk over the last year, but only 15% of the investors actually feel that way.


The gap gets wider with younger investors. A full 84% of the advisors thought members of Generation X and Generation Y want to accumulate more wealth, and only 9% thought the real goal for this age group was wealth preservation.


In reality, these investors -- who tend to be younger than the average advisor -- are much more risk-averse, with only 39% still in accumulation mode despite their relative youth, and a full 22% looking to protect what they already have.


As surveys go, this one is almost actionable. Advisors can use it as a sort of "reality checklist" to make sure they're really talking to their clients, and not to some idealized version that isn't actually there.


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