Wells Fargo/Gallup Survey: Majority of Investors Continue to Believe American Dream is Achievable

U.S. investor optimism steady at 7-year high in second quarter
Seven in 10 say online investing tools are important, but few would use them exclusively

ST. LOUIS, MO. - June 23, 2015 – U.S. investor confidence was steady in the second quarter of 2015 at a seven-year high point, with the Wells Fargo/Gallup Investor and Retirement Optimism Index registering +70 in May, similar to +69 in February. And for the second straight quarter, confidence is about the same among retired (+67) and non-retired (+70) investors. The survey of 1,005 U.S. investors was conducted May 22 through May 31, 2015. The median age of the retiree is 68 and the non-retiree is 45.

Americans Still Confident in "The American Dream"

Confidence in the American Dream remains solid. Eighty-four percent of investors are as confident today as they were a year ago that the American Dream is achievable for them. And the way they define that dream is consistent; nearly all investors – 96% – agree that living comfortably in retirement is a part of their American Dream, up from 92% last year. More than nine in 10 also say their American Dream means affording their own home (93%) and having meaningful employment (92%). Having the world be a better place to live is part of the American Dream for 81% of investors, while having a standard of living that surpasses that of their parents ranks last of the five concepts measured, at 77%.

Investors Fall Short on Having a Written Financial Plan

Over two-thirds (69%) of non-retired investors say they have a specific financial plan to reach their retirement and investment goals, of which about half of these, or 36% of all non-retired investors, say it is a written plan. While that figure has been steady since 2013, it is up from early 2011 when less than a quarter of non-retired investors had a written plan. Additionally, 74% of non-retirees with a written financial plan – up from 66% in 2011 – say they developed it with the help of an investment advisor. Retired investors are only a bit more diligent about financial planning, with 73% saying they have a plan, and 43% having a written plan. Retired investors are more likely to say they stick very closely to what’s in their plan, 63% vs. 48% of the non-retired.

The majority of investors (94% of retirees/89% non-retirees) are highly or somewhat confident that their written financial plan is adequately designed to ensure they will reach their financial goals.

"While the number of people with written plans is slowly trending higher, it's still less than half of investors. It is critical to have a financial plan in place that spans life's major milestones in order to reach your financial goals," said Mary Mack, President of Wells Fargo Advisors. "One of the most important things that our financial advisors do for our clients is to help them translate their financial goals into tangible, written plans that provide the basis for professional advice on every aspect of their finances and individually designed investment portfolios that can help families achieve their life aspirations," said Mack.

Online Investing Tools Appeal, but Most Won't Rely on Them Exclusively

Investors said access to online or digital investing tools is about as important to them as having a strong relationship with a personal financial advisor. When asked about different ways to get financial advice, 71% of investors say that having access to online or digital investing tools is very or somewhat important to them, roughly matching the 70% who say the same about having a strong relationship with a personal financial advisor. That is followed by having on-call access to financial advisors (64%) and having a trusted friend or family member to provide advice (55%).

However, when asked which of the three professional resources is most important to them, having a strong relationship with a personal financial advisor ranked highest (50%), followed by having access to state of the art online or digital investing tools (24%) and on-call access to a financial advisor (19%).

Interestingly, a majority of investors do not feel confident about investing in the market on their own, with 78% saying they prefer consulting with someone for professional advice. And seven out of ten investors (71%) say it is critical or very important to seek professional advice when creating a long-term financial plan.

When asked about their ideal financial advice experience, most investors would prefer to have a blended approach, involving both a personal relationship and digital advice. The largest share, 39%, want the experience to be mostly with a financial advisor, but with an online or digital component. Next, 26% want a mostly digital experience but with access to a financial advisor. Slightly fewer, 23%, want their financial advice entirely from a financial advisor while just 9% want it entirely online or digital.

"Technology is constantly evolving and changing how investors want to interact with their financial services firm. Through this data, investors are telling us they truly value a personal relationship with an advisor, who also uses technology in a collaborative way," said Mack.

Financial Worries of Investors

Of five prominent risks, investors are most concerned about personal identity theft, with 57% saying they worry a lot or a fair amount about it, followed by cyber-attacks on their savings or investment accounts, at 47%. About four in 10 are worried about stock market volatility (42%) as well as investment scams or frauds (41%), and 32% are worried about financial abuse or exploitation of older family members or close friends.

While elder financial abuse trails other risks, one-third of investors (32%) say they know someone who has been the victim of investment scams or financial abuse targeted at the elderly. Almost half of investors (47%) are very or somewhat likely to rely on a personal financial advisor to protect them or a family member from elder abuse in the future.

"Over the past three years, we’ve been seeing reports of such abuse coming in from our advisors and unfortunately, we expect to see that growth continue as our population ages. Financial firms must take an active role in raising awareness and preventing elder fraud and financial abuse, including expanded training and guidance for clients," said Mack.

About the Wells Fargo/Gallup Investor and Retirement Optimism Index

These findings are part of the Wells Fargo/Gallup Investor and Retirement Optimism Index, which was conducted May 22-31, 2015, by telephone. The Index includes 1,005 investors randomly selected from across the country with a margin of sampling error of +/- four percentage points. For this study, the American investor is defined as an adult in a household with total savings and investments of $10,000 or more. About two in five American households have at least $10,000 in savings and investments. The sample size is comprised of 72% non-retired investors and 28% retired investors. Of total respondents, 59% had reported annual income of less than $90,000 and 41% of $90,000 or more. The Wells Fargo/Gallup Investor and Retirement Index is an enhanced version of Gallup’s Index of Investor Optimism that provides its historical data. The median age of the non-retired investor is 45 and the retiree is 68.

The Index had a baseline score of 124 when it was established in October 1996. It peaked at 178 in January 2000, at the height of the dot-com boom, and hit a low of negative 64 in February 2009.

Note: Complete survey results and a chart showing the index movement are available upon request.

About Wells Fargo & Company

Wells Fargo & Company (NYSE: WFC) is a nationwide, diversified, community-based financial services company with $1.7 trillion in assets. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance through more than 8,700 locations, 12,500 ATMs, and the internet (wellsfargo.com) and mobile banking, and has offices in 36 countries to support customers who conduct business in the global economy. With approximately 266,000 team members, Wells Fargo serves one in three households in the United States. Wells Fargo & Company was ranked No. 30 on Fortune's 2015 rankings of America's largest corporations. Wells Fargo's vision is to satisfy all our customers' financial needs and help them succeed financially. Wells Fargo perspectives are also available at Wells Fargo Blogs and Wells Fargo Stories.

About Gallup

For more than 70 years, Gallup has been a recognized leader in the measurement and analysis of people's attitudes, opinions, and behavior. While best known for the Gallup Poll, founded in 1935, Gallup's current activities consist largely of providing marketing and management research, advisory services and education to the world’s largest corporations and institutions.