Schwab Poll Finds FA Clients Focused On Frugality

Registered investment advisors report that their clients are closing their wallets and watching their dimes and quarters. A survey commissioned by Charles Schwab says that 32 percent of advisors cite “frugal spending habits” as the new behavior that’s taking hold in consumers’ lives, followed by a “focus on saving money” at 26 percent.

Registered investment advisors report that their clients are closing their wallets and watching their dimes and quarters. A survey commissioned by Charles Schwab says that 32 percent of advisors cite “frugal spending habits” as the new behavior that’s taking hold in consumers’ lives, followed by a “focus on saving money” at 26 percent. Fifty-nine percent of advisors expect consumer savings to increase in the next six months.

“Advisors tell us that the pain of the last 18 months may have been the catalyst for some positive behavioral changes regarding saving and personal financial responsibility,” says Bernie Clark, senior vice president and head of Charles Schwab Advisor Services.

More than 1,100 RIAs with $252 billion in assets under management responded to the semi-annual Independent Advisor Outlook Study during the week of Jan. 19-29. The survey has a margin of error of plus/minus 2.96 percent. Calling increased frugality “the new normal,” the study reports that 62 percent of advisors say their clients are more focused on paying off debt in the current market. It dovetails with a report last week by America Saves and the American Savings Education Council that says 71 percent of Americans are still concerned about the effect of the recession on their personal finances, with the share of Americans expressing “great concern” at 43 percent.

The Schwab survey suggests less pessimism among advisors about their clients’ prospects for achieving financial goals. Fifty-seven percent of advisors say that meeting those goals will be “very or somewhat difficult,” compared with 84 percent who felt that way in a survey taken a year earlier. Just 10 percent of advisors feel that meeting the goals would be “easy.” But the share of advisors whose clients need reassurance about their financial situation has fallen, the survey says, from 49 percent a year ago to 31 percent now.

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