Faced with retirement funding challenges, French investors say they need new investment approaches and more financial advice
Natixis Global Asset Management has published the results of a global survey of 7,000 investors, including 500 French investors, with net investable assets of at least €183,000.* The survey was conducted across 17 countries in Asia, Europe, the Americas and the Middle East.
Funding their retirement, a long-term priority
Retirement is the number one priority for French investors, and 73% believe that the responsibility for retirement is shifting to individuals, away from governments and employers. They also recognise the existence of large, external threats and other, more personal issues that could have an impact on their retirement finances. In France, 43% of investors believe that inflation poses a threat to their financial wellbeing in retirement, 41% have expressed concerns over their country’s financial situation, and 40% worry about insufficient government pensions. “French investors are acutely aware of their growing responsibility for the funding of their retirement and worried that they won't be able to sustain their standard of living. The challenge is to translate this awareness into a new approach to investing,” says Christophe Point, Director of Distribution for France, French-speaking Switzerland and Monaco at Natixis Global Asset Management.
French respondents are less optimistic than other investors globally
Only 54% of French investors (versus 73% globally) believe their portfolio will perform well in 2015. While 44% of international investors feel optimistic they will achieve better returns than 2014, this figure drops to 21% in France. “French investor confidence is improving at a slower pace, because investors are more sensitive to the inherent volatility of financial markets and feel less prepared. They are aware of the need to generate yield to meet their long-term financial requirements, but 69% have no clear investment objectives and 73% have no financial plan in place,” explains Christophe Point.
Economic and political factors are also a cause for concern. A possible Eurozone recession in the next 12 months was cited as a threat by 48% of respondents (versus 36% globally), followed by a global economic slowdown (43%), low global growth (41%), geopolitical tensions (28%), a rise in interest rates (25%), and terrorism (25%).
French investors are therefore in search of greater security and reliable returns. Many (82%) worry about market shocks, yet feel powerless to protect their investments from the impact. This is partly due to the fact that 53% struggle to avoid making emotional investment decisions in times of surging volatility.
As investors seek out new investment solutions, financial advisors have a key role to play
Interestingly, the survey also revealed that while French investors remain bullish on equities (34% of investors believe stock markets will outperform other asset classes this year), 69% say that traditional approaches to portfolio allocation, mixing stocks and bonds, are no longer the best ways to pursue returns. “Investors are looking for solutions than can protect them from market volatility, diversify their portfolio risk and deliver superior results. They are ready to invest differently,” explains Christophe Point.
To better navigate complex markets, 89% of French investors – including those who don’t consult with advisors – believe that getting professional financial advice is important in making disciplined and rational investment decisions.
French investors are also turning to alternatives in greater numbers. Fourty-six percent invest – up 10% from 2014 – report investing in alternatives. A much higher 67% of French survey respondents would consider alternatives if their advisor recommended them.
“The role of financial advisors has never been so important. Investors are aware that they need to review their investment approach, but to they need help getting there,” adds Christophe Point. “The challenge for financial advisors is to help investors set clear long-term goals based on their personal investment needs, focus on effectively budgeting risk in their portfolios, and consider investment strategies better suited to today’s complex markets.”
*With assets of $200,000 or more.
Natixis Global Asset Management’s 2015 survey of 500 individual investors in France was conducted by CoreData as part of a larger survey carried out globally and covering 7,000 investors across 17 countries in Asia, Europe, the Americas and the Middle-East. The survey looks at investor attitudes to portfolio construction, risk, financial advice, savings, investment and markets. The survey was carried out on-line in January and February 2015 with investors owning net investable assets of 200,000 USD minimum (or an equivalent amount in purchasing power parity). The full report can be obtained via the following link: www.ngam.natixis.com/pressroom. For more information, please visit www.durableportfolios.com.
Natixis Global Asset Management, S.A. is a multi-affiliate organization that offers a single point of access to more than 20 specialized investment firms in the Americas, Europe and Asia. The firm ranks among the world’s largest asset managers.1 Through its Durable Portfolio Construction® philosophy, the company is dedicated to providing innovative ideas on asset allocation and risk management that can help institutions, advisors and individuals address a range of modern market challenges. Natixis Global Asset Management, S.A brings together the expertise of multiple specialized investment managers based in Europe, the United States and Asia to offer a wide spectrum of equity, fixed-income and alternative investment strategies.
Headquartered in Paris and Boston, Natixis Global Asset Management, S.A.’s assets under management totaled $890.0 billion (€735.5 billion) as of December 30, 2014.2 Natixis Global Asset Management, S.A. is part of Natixis. Listed on the Paris Stock Exchange, Natixis is a subsidiary of BPCE, the second-largest banking group in France. Natixis Global Asset Management, S.A.’s affiliated investment management firms and distribution and service groups include Active Investment Advisors;3 AEW Capital Management; AEW Europe; AlphaSimplex Group; Aurora Investment Management; Axeltis; Capital Growth Management; Darius Capital Partners; Dorval Finance;4 Gateway Investment Advisers; H2O Asset Management;4 Harris Associates; IDFC Asset Management Company; Loomis, Sayles & Company; Managed Portfolio Advisors;3 McDonnell Investment Management; Mirova;5 Natixis Asset Management; Natixis Environment & Infrastructure Luxembourg; Ossiam; Reich & Tang Asset Management; Seeyond;6 Snyder Capital Management; Vaughan Nelson Investment Management; Vega Investment Managers; and Natixis Global Asset Management Private Equity, which includes Seventure Partners, Naxicap Partners, Alliance Entreprendre, Euro Private Equity, Caspian Private Equity and Eagle Asia Partners. Visit ngam.natixis.com for more information.
- Cerulli Quantitative Update: Global Markets 2014 ranked Natixis Global Asset Management, S.A. as the 16th largest asset manager in the world based on assets under management as of December 31, 2013.
2 Net asset value as of December 31, 2014. Assets under management (AUM) may include assets for which non-regulatory AUM services are provided. Non-regulatory AUM includes assets which do not fall within the U.S.
Securities and Exchange Commission’s s definition of ‘regulatory AUM’ in Form ADV, Part 1.
3 Division of NGAM Advisors, L.P.
4 An affiliate of Natixis Asset Management.
5 A subsidiary of Natixis Asset Management.
6 A global investment unit of the Natixis Asset Management organization, operated in the U.S. through Natixis Asset Management U.S., LLC.
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Groupe BPCE is the second-largest banking group in France. Through its 100,000 staff, the group serves 35 million customers – individuals, professionals, companies, investors and local government bodies – around the world. It operates in the retail banking and insurance fields in France via its two major networks, Banque Populaire and Caisse d’Epargne, along with Banque Palatine and Oney. It also pursues its activities worldwide with the asset & wealth management services provided by Natixis Investment Managers and the wholesale banking expertise of Natixis Corporate & Investment Banking. The Group's financial strength is recognized by four credit rating agencies with the following senior preferred LT ratings: Moody's (A1, stable outlook), Standard & Poor's (A, stable outlook), Fitch (AA-, negative outlook) and R&I (A+, stable outlook).
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