Survey: Investors Flock to Safety

August 18, 2003 ( - A down market amid a struggling economy has caused many investors to tug on the reins a bit by opting for more conservative options including investments with a guaranteed rate of return.

According to a national consumer survey taken for John Hancock Financial Services, about three-quarters of those polled describe themselves as more conservative investors (76%) than a few years ago and say they are less likely to invest in financial products that run the risk of losing money (73%).

Not only that, but two-thirds are more focused on asset protection versus growth (63%) and are more likely to chase guaranteed rates of return than go for products with variable returns based on the stock market (66%).

The Hancock survey said the trek to conservative investing has hit Baby Boomers particularly hard – likely because of their closer proximity to retirement. Approximately three-quarters of Boomers described themselves as more conservative investors today (78% versus 65% of younger consumers) and say they are less likely to invest in products that run the risk of losing money (75% versus 67% of younger consumers).

More than two-thirds of Boomers are more likely to invest in products that offer guaranteed returns rather than variable returns (67% versus 63% of younger consumers).

“We found that financial decision makers today are increasingly conservative, focusing more on protecting their financial assets and families than building wealth,” James Benson, Hancock senior executive vice president, said in a statement. “Many have altered their portfolios to reduce their exposure to risk and are more interested in products with guaranteed or fixed rates of return.”

In line with their diminished appetite for risk, respondents said they leaned more toward   conservative and protection-focused products such as fixed-rate annuities (71% more likely to purchase) whole and term life insurance (60% and 59% more likely to purchase, respectively) and long-term care insurance (53%).

Importantly, those polled said they don’t see their new approach as a fleeting one with nearly three-quarters (72%) saying they plan to continue to invest in products with guaranteed rates of return even when the economy recovers.

The survey included interviews with 600 investors.