The pandemic is spurring many people in the U.S. to shore up their finances — even those who can afford to invest $1 million.
That’s one finding from a Bank of America Corp. survey of affluent Americans, which showed half of respondents have become more pessimistic on the economy than they were at the start of the year. About 38% were kept up at night worrying about financial setbacks, while 37% were concerned about unexpected increases to health-care expenses, according to survey results released Tuesday.
“People are worried about the economy,” Aron Levine, president of consumer banking and investments at Bank of America, said in an interview. “They’re not spending on travel and leisure,” and instead “those dollars are being repurposed into a combination of incremental saving, or a lot of it’s being invested.”
Four out of five respondents set aside money they normally spent on entertainment, dining and travel and diverted it mainly to savings or emergency funds. More than half of millennials surveyed were taking a more aggressive approach to investing, compared with 23% of respondents nationally. The lender polled 2,000 adults with investable assets of $50,000 to $1 million.
“It’s undeniable that this pandemic has sparked increased trading activity,” Levine said, citing a 140% jump in volume on the bank’s Merrill Edge Self-Directed platform versus the previous year.
Here are other takeaways from the interview and survey:
- Traffic from clients viewing research and educational information from the bank’s chief investment office via Merrill Edge has risen 25-fold.
- Almost 2 million clients have used the so-called Life Plan tool to set financial goals since it was introduced in October. “We would have never predicted this,” Levine said.
- When seeking out insight about the market, 65% of seniors and 59% of baby boomers turn to financial advisers, while 51% of millennials and Gen Zers are relying on online investment platforms.
This article was provided by Bloomberg News.
