Nationwide Investor Behavior Survey...Investor Behavior Survey November 2014 . 1 Section One Page Methodology 2 Section Two Detailed Findings 3 Nationwide, Nationwide is on your side

Investor Behavior Survey

November 2014

1

Section One Page Methodology 2 Section Two Detailed Findings 3

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Contents

Methodology

This survey was conducted online from June 11, 2014 to June 30, 2014 among the U.S. online general population:

§  2,033 U.S. online general population adults aged 18 or older, who are: q  Household financial decision makers q  Have investable assets of $50K or more q  We refer to this group as Total, Consumers, or Overall

§  Respondents are categorized into 5 additional demographic groups, which are not

mutually exclusive: q  Emerging Affluent Gen Y – Ages 18-35, referred to as “Gen Y,” (N=354) q  Emerging Affluent Gen X – Ages 36-49, referred to as “Gen X,” (N=424) q  High Net-Worth Investors with $250K or more in investable assets (N= 811) q  Pre-Retirees – retiring in the next 5 to 10 years (N=454) q  Retirees/Retired – currently retired (N= 451) q  All Others – consumers who fall outside of the categories above (N=356)

Research participants are drawn from the Harris Poll Online (HPOL) research panel. §  Because the sample is based on those who were invited to participate in the HPOL panel (and

not random), we cannot calculate estimates of theoretical sampling error. §  Results are weighted to the U.S. General Online Population of adults by age, sex, race/

ethnicity, education, region and household income. This study is for informational purposes only, does not constitute advice and is not intended and should not be relied upon as an offer or recommendation with respect to the

purchase or sale of any security. In addition, this report does not consider the specific investment objectives, financial situation and particular needs of any person.

2

Detailed Findings

3

In your ability to save for retirement

In your retirement plan provider's ability to prepare you for retirement

That you know how much to save for retirement

That your retirement savings plan will provide you with adequate income in retirement

That you will have enough saved for retirement

49%

47%

45%

43%

42%

66%

61%

59%

61%

62%

4

Confidence in Saving for Retirement (Very/Extremely Confident)

Base: All Qualified Respondents (N=2033), Gen Y Emerging Affluent (N=354), Gen X Emerging Affluent (N=424), Pre-Retiree (N=454), Retired (N=451), High Net-Worth (N=811) Q1005 How confident are you…?

Overall, fewer than half (42-49%) of consumers are confident in their financial preparedness for retirement Retirees and High-Net Worth are more confident than Gen Y, Gen X and Pre-Retirees.

45%

44%

41%

37%

37%

55%

46%

50%

43%

43%

46%

47%

43%

38%

36%

Total

Gen Y Emerging Affluent [B]

Gen X Emerging Affluent [C]

Pre- Retiree [D] Retired [E]

High Net- Worth [F]

64%

60%

58%

59%

58%

D BCD BCD

BCD BCD

D BCD BCD

BCD BCD

BCD BCD

Letters indicate a statistically significant difference between lettered (B,C,D,E,F) groups at the 95% confidence level.

Total

Gen Y Emerging Affluent

[B]

Gen X Emerging Affluent

[C]

Pre-Retiree

[D] Retired

[E]

High Net-worth

[F]

Among those who have something in savings—amount currently in savings

Mean $73,900 $59,200 $91,400 $73,700 $97,600 B $127,000 BDE

Median $20,000 $15,000 $20,000 $25,000 $30,000 $38,000

Amount believed should be in savings

Mean $264,000 $553,100 DE $229,900 $197,400 $136,600 $334,400 E

Median $50,000 $30,000 $35,000 $50,000 $50,000 $50,000

% difference between amount currently in savings vs. amount believed should be in savings (median)

100% 75% 100% 67% 32%

5

High Net-Worth believe they should be saving 32% more than they are currently while the other subgroups believe they should be saving between 67% and 100% more.

All groups feel they should have more money saved at this point than they do

Have Savings Account

Base: Has Savings Account (N=1861), Gen Y Emerging Affluent (N=322), Gen X Emerging Affluent (N=395),Pre-Retiree (N=419), Retired (N=413), High Net-Worth (N=756) Q1015 Approximately how much do you have in your savings account(s)? Please use a whole dollar amount. Q1020 Approximately how much do you believe you should have in your savings account(s)? Please use a whole dollar amount.

Letters indicate a statistically significant difference between groups at the 95% confidence level; outliers have been removed..

I guessed

A recommendation from a financial advisor I did my own research with books and/or articles that talked about how much money people need for retirement I calculated it based on how much I earned during my working career or based on my most recent salary

I used an online calculator

I spoke with friends who have already retired

I spoke with my parents who have already retired

I contacted the Social Security Administration

6

Amount of money needed for retirement determined by…

Base: Provided Amount Needed To Retire (N=1561), Gen Y Emerging Affluent (N=349), Gen X Emerging Affluent (N=410), Pre-Retiree (N=448), Retired (NA), High Net-Worth (N=539) Q1040 How did you determine the amount of money you will need to retire?

Many consumers (40%) are guessing about the amount of money they will need to retire

35%

18%

17%

16%

8%

2%

2%

3%

36%

11%

17%

16%

8%

4%

5%

4%

41%

20%

14%

11%

9%

3%

1%

1%

Total



Pre- Retiree [D]

High Net- Worth [F]

40%

16%

15%

14%

8%

3%

2%

2%

26%

23%

20%

17%

9%

1%

2%

2%

F F F

B B BD

C

C

F

CDF

Letters indicate a statistically significant difference between groups at the 95% confidence level.

All groups rarely reach out to retired friends (1-4%), family (1-5%) or the Social Security Administration (1-4%).

71%

11%

18%

Currently investing enough

Not currently investing enough

Not sure

7

Amount of money should be investing vs. amount currently investing

Base: All Qualified Respondents (N=2033), Gen Y Emerging Affluent (N=354), Gen X Emerging Affluent (N=424), Pre-Retiree (N=454), Retired (N=451), High Net-Worth (N=811) Q1045 Overall, how much money do you think you should be investing versus how much you are investing for retirement purposes?

Overall, nearly a fifth (18%) of consumers are not sure if they are investing enough for retirement Gen Y is more likely (68%) than other consumers (11-56%) to report they are not currently investing enough for retirement.

19%

68%

14%

25%

56%

19%

Total




High Net- Worth [F]

39%

44%

18%

57%

32%

11%

33%

49%

18%

B BCDF BCD

F F F


EF EF CDEF E

Gen Y is more likely (14%) than other consumers (2-8%) to report they

should be investing 60% or more for retirement than they are now.

39% 36% 37% 40% 31% 26%

61% 64% 63% 60% 69% 74%

Total Gen Y Emerging Affluent [B]


Pre-Retiree [D] Retired [E] High Net-Worth [F]

8

Base: All Qualified Respondents (N=2033), Gen Y Emerging Affluent (N=354), Gen X Emerging Affluent (N=424), Pre-Retiree (N=454), Retired (N=451), High Net-Worth (N=811) Q727 Do you have a financial plan?

Overall, three out of five consumers (61%) have a financial plan

Yes No

D

Has a Financial Plan

BCDE

F F EF F


High Net-Worth consumers are the most likely to have a financial plan (74%).

Overall, a quarter (27%) of those who don’t have a financial plan “have not gotten around to it.” In addition, a fifth (20%) say they don’t need one and the same amount don’t know how to create one. •  Gen Y (40%), Gen X (30%) and Pre-Retirees (29%) are most likely to have not created a financial plan because they are

procrastinating. •  Retirees (44%) and High Net-Worth (35%) are more likely than Gen Y (9%), Gen X (15%) or Pre-Retirees (12%) to say they

don’t need one. •  The thought of creating one is more overwhelming to Gen Y (28%) compared to the other subgroups (9%-15%).

9

Base: Does Not Have A Financial Plan (N=833), Gen Y Emerging Affluent (N=137), Gen X Emerging Affluent (N=187), Pre-Retiree (N=185), Retired (N=139), High Net-Worth (N=221) Q730 What are the reasons you do not have a financial plan? Please select all that apply.

Have not gotten around to it yet.

Don't need one.

Don't know how to create a financial plan.

Useless because don't earn enough/have enough assets.

Do not plan to retire for a long time. All of the information needed is in my head, don't need a formal one. The thought of creating one is too overwhelming. Don't expect to ever be able to retire.

Other

29%

12%

19%

13%

7%

20%

15%

13%

11%

14%

44%

11%

13%

1%

20%

9%

2%

16%

27%

20%

20%

17%

16%

15%

14%

13%

8%

Reasons for Not Having a Financial Plan

40%

9%

30%

23%

34%

8%

28%

17%

2%

30%

15%

21%

14%

23%

10%

10%

18%

3%




High Net- Worth [F]

18%

35%

14%

7%

7%

26%

13%

6%

15%

EF


EF EF

BCD BCD

EF

F F F F

DEF DEF E E

BC B BC

CDEF

EF EF EF E

BC BC BC

Do own research and make own investment decisions

Make own decisions, but use investment professional for information and a second opinion

Delegate decisions about investments to an investment professional

38%

31%

31%

10

Investment Approach

Base: All Qualified Respondents (N=2033), Gen Y Emerging Affluent (N=354), Gen X Emerging Affluent (N=424), Pre-Retiree (N=454), Retired (N=451), High Net-Worth (N=811) Q1000 To help us understand your approach to investing, please indicate which one of the following statements comes closest to describing you right now.

Pre-retirees (24%), Retirees (31%) and High Net-Worth (24%) groups are more likely than either Gen Y (6%) or Gen X (13%) to delegate investment decisions

Gen Y (58%) and Gen X (54%) are more likely than the other subgroups (38-46%) to do their own research and make their own investment decisions.

46%

31%

24%

58%

36%

6%

54%

33%

13%

Total




High Net- Worth [F]

48%

32%

19%

43%

33%

24%

DEF DEF

B BC BCF BC


Financial advisor/ professional

Web sites

My “gut” feeling

“Traditional" media

Family

Friends

Books

Financial blogs

Social media

Other

55%

45%

31%

41%

30%

26%

23%

17%

6%

4%

62%

33%

36%

37%

14%

9%

11%

14%

1%

7%

51%

43%

35%

33%

29%

19%

18%

17%

5%

4%

Gen Y are more likely than other subgroups to turn to family (50% vs. 14-34%), financial blogs (28% vs. 14-20%) and social media (14% vs. 1-8%) for financial planning.

11

Resources Used for Financial Planning Needs

Base: All Qualified Respondents (N=2033), Gen Y Emerging Affluent (N=354), Gen X Emerging Affluent (N=424), Pre-Retiree (N=454), Retired (N=451), High Net-Worth (N=811) Q703 (Q12) Which, if any, of the following resources do you use for your financial planning needs?

Overall, half of consumers (51%) use an advisor for planning needs, followed by the web (43%)

39%

49%

37%

23%

50%

31%

21%

28%

14%

1%

50%

51%

34%

35%

34%

23%

22%

19%

8%

1%



Pre- Retiree [D] Retired [E] High Net-Worth [F]

62%

45%

34%

41%

24%

20%

21%

20%

5%

5%

B B BC BCD

E E E E

B B B B

EF CDEF EF E

E CEF EF E

E E E E

E CDEF

CDEF E E E

C BCD BC


I have taken ac+on with my financial advisor/ professional in the past year (Net)

I met or spoken with him/ her at least once in the past year

I had him/her move assets to or from the stock market, bonds, CDs, or money market accounts

I created/modified a formal financial plan with my financial advisor/professional I have not taken any action with my financial advisor/professional in the past year

86%

69%

36%

34%

14%

12

Activities Done with Financial Advisor/Professional in Past Year

Base: Currently Works With A Financial Advisor/Professional (N=1180), Gen Y Emerging Affluent (N=192), Gen X Emerging Affluent (N=238), Pre-Retiree (N=271), Retired (N=301), High Net-Worth (N=545) Q715 (Q7) Which, if any, of the following have you done with your financial advisor/professional within the past year? Please select all that apply.

Overall, a large majority (86%) have taken at least one of the actions presented (with their financial advisor) in the past year

Retirees (83%) and High-Net Worth (77%) are more likely than Gen Y (55%), Gen X (62%) and Pre-Retirees (68%) to have met with/spoken to their advisor in the past year.

83%

68%

36%

38%

17%

86%

55%

36%

39%

14%

87%

62%

40%

42%

13%

Total




High Net-Worth [F]

91%

77%

42%

37%

9%

88%

83%

35%

28%

11%

BCDF BCD

E

E

B

E E


F

D

13

I think professional financial advice will help me be more successful in meeting my goals than going it alone.

Base: All Qualified Respondents (N=2033), Gen Y Emerging Affluent (N=354), Gen X Emerging Affluent (N=424), Pre-Retiree (N=454), Retired (N=451), High Net-Worth (N=811) Q1110 How much do you agree with this statement?

Overall, more than half (56%) agree that professional financial advice will help them be more successful than going it alone


20% 22% 15% 20% 24% 25%

24% 22% 28% 22% 20% 19%

56% 56% 56% 59% 56% 57%

Total Gen Y Emerging Affluent

[B]

Gen X Emerging Affluent

[C]

Pre-Retiree [D]

Retired [E]

High Net-Worth [F]

Agree (Top 2 Box) Neutral Disagree (Bottom 2 box)

EF

C CD

High Net-Worth (25%) and Retirees (24%) are more likely than Gen X (15%) to disagree that professional financial advice is better than going it alone.

I can share the decision- making process with those who know more about investing than I do

Confident I n my decisions based on my own extensive analysis

Empowered - I'm actively involved in navigating and may be soliciting input and consultation to help me, but I'm making the decisions

I'm in synch with what most people are doing, "I belong"

39%

29%

24%

8%

14

Comfort Level with Finances

Base: All Qualified Respondents (N=2033), Gen Y Emerging Affluent (N=354), Gen X Emerging Affluent (N=424), Pre-Retiree (N=454), Retired (N=451), High Net-Worth (N=811) Q1105 Regarding my finances, I am most comfortable when I feel….

Overall, consumers are most comfortable sharing decision-making with those who know more about investing than they do (39%)

Gen Y is more likely (33%) than any other subgroup (18-25%) to be most comfortable when they feel “Empowered.”

44%

28%

21%

7%

30%

24%

33%

13%

39%

28%

22%

11%

Total




High Net-Worth [F]

38%

32%

25%

6%

42%

35%

18%

5% DEF

CDEF

EF

BF

B

B

B

B

E


Documents

Nationwide Investor Behavior Survey...Investor Behavior Survey November 2014 . 1 Section One Page Methodology 2 Section Two Detailed Findings 3 Nationwide, Nationwide is on your side