“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