Americans are allocating a smaller share of their spending to investment-related fees since the recession, a sign they are still wary of returning to financial markets even as stocks trade near record highs.

Spending on expenses including securities commissions, investment advice and custodial services totaled about $150.8 billion in February at a seasonally-adjusted annual rate, Commerce Department data show. That accounted for 1.3 percent of total personal consumption, matching the average since the 18- month recession ended in June 2009, compared with 1.6 percent in the 12 months before the downturn started. March figures are scheduled to be released April 29.

“People are shying away from stocks since the recession, reflecting a very conservative approach to investing,” said Stuart Hoffman, chief economist at PNC Financial Services Group Inc. in Pittsburgh. Even though stock indexes have more than doubled since March 2009, consumers “haven’t really re-engaged in equities again.”

The Standard & Poor’s 500 Index closed at a record 1,593.37 on April 11, up almost 136 percent from the March 9, 2009 low of 676.53. Americans aren’t budgeting as much for investment activities, suggesting many people haven’t recouped losses from the stock market’s rout, even with the ensuing bull market, said Komal Sri-Kumar, founder of Sri-Kumar Global Strategies Inc. in Santa Monica, California, and chairman of the comprehensive asset allocation committee at TCW Group Inc., which oversees $750 million in assets.

Fund Outflows

Outflows from U.S.-based stock mutual funds totaled about $1.4 billion in February and have been negative for 36 out of 44 months since the recession ended, according to data from the Investment Company Institute in Washington. This illustrates “individual investors’ reluctance to participate in the equity market rally,” Sri-Kumar said. “Consumer enthusiasm just doesn’t exist right now, particularly for stocks.”

The experience of the past several years has made a “much more conservative trader” out of Fred Alexander Rodriguez, 34, a New Yorker working in information technology. Whereas investing in the stock market was a “no-brainer” before the recession, after buying a home in 2007 and watching its value decrease, as well as that of his 401K retirement plan, Rodriguez said his views have “changed pretty dramatically.”

Intestinal Fortitude

“I don’t have the intestinal fortitude to gamble like I did and see no need to trade like a cowboy,” Rodriguez said, adding that the amount he spends on investing also has decreased because he now executes about one trade a month, down from as many as eight. “Everything that I thought I understood about the market seemed to wash away and get replaced with doubts and fears.”

While Rodriguez has stayed in the market, some who were financially hurt by the recession and dropped out are finding it “very intimidating to jump back in,” said Charles Rotblut, of the American Association of Individual Investors in Chicago, a membership organization with an average age of 65. There’s an “underlying sense of bearishness and frustration” that’s made some people “check out of the market altogether,” said Rotblut, editor of the AAII Journal.

“People are nervous that another shoe could drop” in the form of another recession emanating from the European debt crisis, Rotblut said.

Risk-Averse

Similarly, near record-low interest rates haven’t been enough to push would-be investors back into the stock market, as “many consumers remain risk-averse,” said Greg McBride, a senior financial analyst at Bankrate Inc., the interest-rate aggregator based in North Palm Beach, Florida. Seventy-six percent of Americans said they aren’t more inclined to invest because of low rates offered for savings accounts and certificates of deposit, according to data from Bankrate.com.

“People still aren’t swayed to invest in stocks and they continue to hunker down in safe haven investments,” McBride said. The portion of survey respondents who said they’re not inclined to invest in stocks is unchanged from a year ago, even though interest rates have come down and the stock market has rallied in the interim, he said.

Until there’s greater economic stability and less volatility in the equity market, consumers probably will remain “very lackadaisical” toward investing in general, Sri-Kumar said.

Gross domestic product grew 2.5 percent in the three months ended March 31, following a 0.4 percent gain in the fourth quarter, the Commerce Department reported today. Growth was slower than the 3 percent median estimate of economists surveyed by Bloomberg.

Time Bomb

Consumer reluctance to spend on financial services since the downturn “is essentially a time bomb for the future” and is concerning because “it can’t just be institutional investors present in the equity market,” Sri-Kumar said. “It’s as if consumers got hit over the head and aren’t saving enough for retirement.”

A lingering fear from the market’s collapse in 2008 and the related losses from that continue to hold back many would-be investors, Hoffman said. People who lost a lot of money may not be able to justify paying a financial adviser anymore or buying and selling stocks, cutting down on fees and commissions, he said.

Unsustainable Level

Investment-related spending appears to be stabilizing “from an artificially high level” reached in the market boom that preceded the recession, said Robert Dye, chief economist for Dallas-based Comerica Bank. In addition, there may be some “downward pressure” on the rate that companies are charging for financial services fees, he said.

“There certainly was a speculative environment in 2006 and 2007 that encouraged activities like day trading that boosted this rate to an unsustainable level,” Dye said. This share of spending may be normalizing now, which “could be a fairly positive outcome,” he said.

Investment spending hasn’t fallen below its 23-year average, which shows “people aren’t stuffing money in the mattress or burying a jar in the backyard,” he said.

Since January 1990, spending on commissions, investment advice and custodial fees has represented about 1.3 percent of total personal consumption, the same as February’s level, data from the Commerce Department show. Such spending peaked at 2 percent in March 2000, the same month the S&P 500 hit what was then an all-time high of 1527.46.

Health Spending

While money allocated to financial services has contracted since 2007, other expenses have increased. Health-care expenditures -- including outpatient services and hospitals -- accounted for 16.3 percent of total personal consumption in February, up about 2 percentage points from the 10-year prerecession average, Commerce Department data show.

Still, the equity rally so far this year could entice more individuals to return to the market, causing the share of spending on financial services to “blip up” again, Hoffman said. The S&P 500 has risen 11 percent since Dec. 31.

Even amid the market’s recent gains, the fear of losing a lot of money again continues to leave many consumers on the sidelines, Sri-Kumar said.

“People need to get a good rate of return on their investments to support future spending needs and they’re not going to get that from their bank accounts or fixed income,” he said. “They need to be encouraged to come into the equity market again.”