Savings Rates Falter Among Investment Adviser Clients

Financial advisers believe many of their clients are not saving enough money and will fall short of their financial goals, according to the most recent quarterly survey of U.S. financial advisers by Russell Investments.

More than a third of advisors, 36%, considered up to half of their clients at "significant risk," and 44% considered a quarter of their clients at significant risk.

Why?

About a quarter of advisers said their clients aren't willing to save enough, and 22% said their clients simply didn't have enough money.

Suzanne Uhl-Melanson of Commonwealth Financial Group told Russell Investments, "I see my overwhelming challenge to be convincing clients about the need to either work longer or save money."

Another financial adviser said the issue comes down to discipline.

That goes for any kind of savings plan, whether it's for retirement or to bolster a fragile emergency savings fund. Stock market gains and the best CD rates can't make up for anemic savings rates.

Savings Rates: One Thing Clients Can Control

"In today's environment, it is important to focus on what you can control as an investor--such as your savings rate--and be cautiously prudent with the things you can't control, such as the markets," Phil Rogerson, Russell's managing director said in media statement announcing the survey results.

Meanwhile, the survey showed financial advisers are feeling more certain about allocation decisions in the equity markets. Fewer advisers said they were unsure about plans to shift allocations than three months ago.

More advisers reported planned allocations to value-oriented U.S. equity asset classes, up 7 percentage points, and to real estate, up 8 points. About 39% and 43% of advisers say they will decrease allocations to corporate and high-yield bonds, respectively, an increase of 9 points since March 2010.