Nearly 3 In 4 Investors Steering Clear Of Risks Since COVID-19

Des Moines, Iowa – October 27, 2020 –  A new study from F&G, a leading provider of fixed indexed annuities and life insurance, found that 72% of respondents say the events of the last six months, including the pandemic, social unrest and market volatility, have made them less likely to take risks in general. The finding was part of F&G’s inaugural Risk Tolerance Tracker, a survey of 1,463 adults aged 30 and older exploring how the events of the last six months have shifted American investors’ views on risk.

The survey also found a rise in retirement income worries, with 60% of respondents citing concern in this area. These retirement income concerns spanned generational lines and were especially pronounced for Gen X respondents aged 40 to 55, of which 67% said they were very or somewhat worried.

“It’s clear that the global pandemic, coupled with financial and social volatility, has had a significant impact on how American investors view risk personally and financially,” said Chris Blunt, CEO of F&G. “Rising levels of financial worries among American investors underscore the security and peace of mind that insurance products can provide through retirement, yet many American investors are not taking advantage of them.”

COVID Induced Risk Aversion By Gender And Generation

The survey found that recent events have altered how American investors view risk-taking in their lives and finances – especially among women and millennials.

Interestingly, risk aversion diverged across gender lines, especially regarding financial risk. For example, women reported a more risk-averse approach to investing in comparison to men.

• Two in five women (41%) indicated that they pursue only cautious/highly conservative investment strategies, in contrast to only 22% of men.
• In addition, 37% of men said that they have shifted their asset allocations to be more aggressive during this time, compared with only 27% of women.

Generational worries about monetary security and losing their financial safety nets have emerged since COVID-19. For instance, when asked whether they feel like their financial safety nets have been taken away as a result of COVID-19, the following percentages agreed:

• 61% of millennials
• 56% of Gen X
• 44% of baby boomers

One-third of respondents (33%) reported that they were more likely to explore new types of financial products that they haven’t used before post-COVID-19 than they were prior to the pandemic. Across generational lines, 52% of millennials, 46% of Gen X respondents and 17% of baby boomers said that they were more likely to explore new financial products when asked the same question.

While each individual’s appetite for risk is different, before embarking on any financial strategies, a financial or insurance professional can help weigh the pros and cons based on a person and family’s individual circumstances.

“While American investors are feeling financially uncertain amid the pandemic, their appetite for new financial products has risen,” said Blunt. “The findings of this survey underscore the importance of using a financial professional who can help you build a holistic plan that includes income guarantees like annuities. Unlike any other financial vehicles, annuities can provide income that you cannot outlive, yet only 15% of survey respondents cited that either they or other members of their household currently own them.”

For more information on F&G’s Risk Tolerance Tracker, please visit success.fglife.com/risktolerancetracker.

Survey Methodology

This CARAVAN survey was conducted by ENGINE INSIGHTS among a sample of 1,463 adults 30 years of age and older. This survey was live on September 16-23, 2020. Completed interviews are weighted by five variables: age, sex, geographic region, race and education to ensure reliable and accurate representation of the total U.S. population, 18 years of age and older.