Recently ACM Wealth conducted an investor survey to better understand the concerns and actions of our clients through the COVID -19 pandemic. Questions ranged from COVID-19 related topics to financial planning priorities.
The survey found that 62% of clients have remained fully invested throughout the market’s swoon. 25.3% of clients did raise less than 25% in cash. And 7.9% have raised less than 50% cash. While only 1.5% of investors left the market completely.
The ability to stay the course maybe due to the levels of reserve cash clients came into this crisis with. When asked the amount of (non-investment) cash reserves on hand ACM clients responded:
Less Than 6 months 31.7%
6-12 months 22.2%
More than 1 year 44.4%
No Responses 1.5%
The Secure Act has forgiven required minimum distributions (RMDs) from qualified accounts this year due to the COVID-19 crisis. For those ACM clients normally required to do so, 55% stated that will elect not to take their 2020 RMD’s.
In today’s commentary entitled Upsized Uncertainty: The Opposite of Lower for Longer, ACM’s Paul Broughton writes, “Sometimes the best investment decision is to not do anything – to not overreact.” This seems to have rung true for ACM clients. When asked if they would “most likely” or “not likely” do the following 5 financial tasks below the overwhelming response was “not likely”.
1. Increase my stock exposure
2. Decrease my stock exposure
3. Reduce my annual distributions from my investments
4. Add money to my investments
5. Reduce my investment assets
As the recovery presses on, we asked clients how they would participate after home quarantine is over and states begin to open up for business?
I will stay put until there is a medical solution to COVID-19 11.4%
I will follow state opening guidelines and participate with precautions 59.0%
I will wait and see what the first wave of openings brings 29.5%
I will particiapte fully 9.8%
We also asked what activities clients would participate in without a COVID-19 vaccine and received the following results. Activities with large crowds not surprisingly came up has a concern.
Travel by plane? 31.3%
Go to a theme park? 5.8%
Go to a sports event or concert? 13.7%
Visit a place of worship? 45.0%
Go out to eat in a restaurant? 58.8%
With regard to wealth planning, clients where asked which financial objectives they would like to achieve in the next 12 months.
Retirement planning 25.0%
Estate planning 20.4%
Life or long-term care insurance 15.9%
Charitable giving planning 4.5%
Investment consolidation and planning 36.3%
Roth conversion planning 9.0%
And finally, we found that despite the “new normal”, clients have been busy keeping close contact with our firm and our advisors through a number of services and means of communication.
I have had a ZOOM meeting or phone call with my advisor. 33.8%
I have participated in a podcast or webcast. 38.9%
Reading ACM Wealth’s weekly client briefing via email. 89.8%
Retirement income planning 18.6%
Insurance services 0.0%
Estate Planning Services 3.3%
