The quest for certainty

Global Atlantic survey shows investors prioritize protection

For investors, 2023 was another challenging year to predict. Interest rate hikes and stubborn inflation combined with strong market performance have created a fair amount of mixed signals. By late 2023, it was clear that many investors valued stability, protection, and guaranteed retirement income over potentially more profitable — but riskier — investments.

A new survey from Global Atlantic, conducted in December 2023, sheds light on how investors felt about the year and how they are approaching 2024. The results are based on interviews with than 1,000 investors between the ages of 55 and 75 with investable assets between $250,000 and $1 million. Let’s dig into the findings and see how they may be able to inform future discussions with your clients.

"...96% of respondents are at least somewhat concerned about volatility, recession, and high interest rates..."

Setting the scene

First things first: how does everyone feel about their investments? Our survey found that, by the end of 2023, the top emotion for investments was satisfaction, with 54% of respondents feeling that way. Other top responses were indifference (11%), excitement (10%). Around 19% of respondents said they felt disappointment — down from 37% when the same survey was conducted in April 2023.

Start with certainty

There’s something to be said about predictability. Respondents to our survey highlighted a desire for certainty amid an increasingly unstable economic environment. Most tellingly, 96% of respondents are at least somewhat concerned about volatility, recession, and high interest rates, with only about 54% of respondents saying they feel adequately protected from market downturn.

With concerns about volatility topping the list, it should come as no surprise that nearly half of investors say that protection of assets is their top priority, and more than 61% say that protection is more important than growth. Furthermore, their top financial priority is creating or utilizing a retirement income plan that provides lifetime income — 65% ranked this as either their first or second most important goal.

The biggest concerns

Investors are seeking protection and certainty, and these priorities are set against a backdrop of concerns about several factors that could impact their retirement plans. Health care costs are at the top of the list, with a whopping 90% of respondents saying they are at least somewhat concerned about how they could affect their retirement. Inflation was another chief worry, with 87% saying they were at least somewhat concerned.

Social Security is also something on the radar of many investors, with 74% of respondents saying they’re extremely, somewhat, or very concerned about Social Security providing full benefits for life.

The annuity factor

With protection, certainty, and lifetime income among the most significant goals for investors, many are considering products that offer avenues to help them achieve these goals. Specifically, almost three-quarters of respondents (74%) have considered, or already have, annuities as part of their portfolios. This outpaces other alternatives, including Treasuries (52%), ETFs (47%), and REITs (42%).

In fact, several respondents pointed to annuities as one of the best things their financial professional did or said in 2023.

“He talked to me about annuities. And I’m thrilled I listened,” one respondent said.

Have the right conversation

Interestingly, only about half of respondents (49%) say that they have a good handle on how their investments are allocated. This provides an opportunity for financial professionals to have in-depth allocation conversations with their clients to address their concerns, whether it be about protection, longevity, market volatility, or Social Security.

Take a closer look at a breakdown of key findings, which may provide even greater insight into the minds of investors.