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HSBC Press release
Survey Reveals Cash is Growing in Importance for Affluent Investors
58% of Investors Actively Watching Cash for Investment
NEW YORK -- HSBC Bank USA, N.A., the U.S. banking unit of one of the world’s largest financial services companies, today announced the results of its HSBCdirections Investor/Advisor Survey which revealed that the majority of mass affluent investors are taking control of their own finances and focusing more on cash and cash equivalents. The survey results were based on a sample of more than 700 financial advisors and mass affluent investors, with mass affluent defined as individuals with less than $1 million in investable assets.
Eighty percent of mass affluent investors surveyed view cash as an important component of their portfolios. The same number reported that they seek their own financial information, with more than one in four using the Internet to check interest rates weekly, nearly half using it to trade stocks, and two-thirds transferring funds between various bank/brokerage accounts online.
“Today’s smart investors are bullish about cash and active about finding the best returns for this sometimes overlooked asset class,” said Martin Glynn, chief executive officer of HSBC Bank USA, N.A. “The data revealed a considerable opportunity for investors and financial advisors to think more about cash as an investment and optimize the yields on those cash positions.”
The HSBCdirections Survey revealed advisors and mass affluent investors’ views on cash*, including:
<li> 58% of investors said they are actively considering cash as an investment.
<li> More than 1 in 3 investors have over 20% of their portfolio in cash.
<li> Advisors believe their typical client has only 12% of their portfolio in cash.
<li> 70% of advisors reported having made a cash recommendation to clients within the last six months.
<li> When asked how they would invest $100,000, mass affluent investors said they would allocate twice as much to cash than their advisors.
The survey found that investors and advisors agree on the appeal of Online Savings Accounts (OSAs). When the features of OSAs were described, more than 70% of investors and advisors said they were interested in, or would likely recommend, an equivalent investment.
“Although Online Savings Accounts are relatively new to the personal finance landscape, two-thirds of the mass affluent investors and more than three quarters of the financial advisors surveyed are aware of this savings vehicle that takes advantage of banks’ reduced paperwork and lower overhead costs to provide higher yields to customers,” said Kevin Newman, senior executive president and head of personal financial services for HSBC. “Investors and advisors alike are showing they recognize the all-around benefits of this innovative way to grow cash.”
<li> Both mass affluent investors and financial advisors found OSAs attractive.
* 84% of mass affluent investors responded that they were interested in an OSA.
* 91% of these investors said they preferred OSAs to a six-month CD.
<li> Availability of an OSA would cause both mass affluent investors and financial advisors to boost cash allocations.
* 58% of investors would increase their cash allocation if they had an OSA.
* Nearly half of financial advisors would increase their recommended cash allocation if an OSA was available at their financial institution.
Additional Survey Data Includes:
<li> 76% of financial advisors said they would likely recommend an OSA to their clients if it was available through their financial institution
<li> 72% of investors correctly believed that it is possible to receive more than 3% on a savings account in today’s rate environment, while only 61% of advisors believed the same.
Survey Reveals Cash is Growing in Importance for Affluent Investors
58% of Investors Actively Watching Cash for Investment
NEW YORK -- HSBC Bank USA, N.A., the U.S. banking unit of one of the world’s largest financial services companies, today announced the results of its HSBCdirections Investor/Advisor Survey which revealed that the majority of mass affluent investors are taking control of their own finances and focusing more on cash and cash equivalents. The survey results were based on a sample of more than 700 financial advisors and mass affluent investors, with mass affluent defined as individuals with less than $1 million in investable assets.
Eighty percent of mass affluent investors surveyed view cash as an important component of their portfolios. The same number reported that they seek their own financial information, with more than one in four using the Internet to check interest rates weekly, nearly half using it to trade stocks, and two-thirds transferring funds between various bank/brokerage accounts online.
“Today’s smart investors are bullish about cash and active about finding the best returns for this sometimes overlooked asset class,” said Martin Glynn, chief executive officer of HSBC Bank USA, N.A. “The data revealed a considerable opportunity for investors and financial advisors to think more about cash as an investment and optimize the yields on those cash positions.”
The HSBCdirections Survey revealed advisors and mass affluent investors’ views on cash*, including:
<li> 58% of investors said they are actively considering cash as an investment.
<li> More than 1 in 3 investors have over 20% of their portfolio in cash.
<li> Advisors believe their typical client has only 12% of their portfolio in cash.
<li> 70% of advisors reported having made a cash recommendation to clients within the last six months.
<li> When asked how they would invest $100,000, mass affluent investors said they would allocate twice as much to cash than their advisors.
The survey found that investors and advisors agree on the appeal of Online Savings Accounts (OSAs). When the features of OSAs were described, more than 70% of investors and advisors said they were interested in, or would likely recommend, an equivalent investment.
“Although Online Savings Accounts are relatively new to the personal finance landscape, two-thirds of the mass affluent investors and more than three quarters of the financial advisors surveyed are aware of this savings vehicle that takes advantage of banks’ reduced paperwork and lower overhead costs to provide higher yields to customers,” said Kevin Newman, senior executive president and head of personal financial services for HSBC. “Investors and advisors alike are showing they recognize the all-around benefits of this innovative way to grow cash.”
<li> Both mass affluent investors and financial advisors found OSAs attractive.
* 84% of mass affluent investors responded that they were interested in an OSA.
* 91% of these investors said they preferred OSAs to a six-month CD.
<li> Availability of an OSA would cause both mass affluent investors and financial advisors to boost cash allocations.
* 58% of investors would increase their cash allocation if they had an OSA.
* Nearly half of financial advisors would increase their recommended cash allocation if an OSA was available at their financial institution.
Additional Survey Data Includes:
<li> 76% of financial advisors said they would likely recommend an OSA to their clients if it was available through their financial institution
<li> 72% of investors correctly believed that it is possible to receive more than 3% on a savings account in today’s rate environment, while only 61% of advisors believed the same.
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