Investors are so concerned about how the presidential election will impact their financial situation over the next 12 months that it beats out their fears about inflation and interest rates, according to a new Janus Henderson survey.

Seventy-eight percent of investors reported that they’re concerned about how the upcoming presidential election may impact their financial and investment plan over the next year, according to the “U.S. 2024 Janus Henderson Investor Survey released today.

The other investor concerns were persistent inflation (70%), high interest rates (57%), poor stock market performance (57%), or a potential recession (55%), according to the survey of 1,000 mass affluent and high-net-worth investors.

Over the next decade, 77% of investors said that they remain deeply worried about “the long-term impact of growing political discord within the U.S."

After the outcome of the upcoming election, the top worries of investors are healthcare (67%), the U.S. national debt (66%) and U.S.-China relations (64%), Janus Henderson reported.

At the same time, investors’ shift out of equities continues.

“During the past 12 months, 33% of survey respondents have shifted assets from equities to cash or fixed-income investments and nearly as many investors (32%) say they are planning to shift assets from equities to cash or fixed-income investments in the next 12 months. The primary reasons for shifting or planning to shift out of equities include higher interest rates, acting on a recommendation from their advisor, and feeling safer in cash or fixed income,” the survey found.

More than half of all respondents (54%) report they are preparing for a recession, down from 65% in 2023.

“The news cycle is moving at an incredible pace and headlines can be unnerving, but U.S. equities have remained remarkedly resilient in the face of elevated levels of uncertainty,” Matt Sommer, head of specialist consulting at Janus Henderson Investors, said in a statement.

“In times like these, all investors should keep in mind that changes to a portfolio designed to avoid short-term volatility can often jeopardize long-term goals,” Sommer said.

“Amid the elevated unpredictability, investors who own mutual funds or ETFs (43%) report they prefer an equal mix of active and passive funds in their portfolio, while 26% favor active managers, 18% passive managers, 10% have no preference and 3% were unsure,” the survey found.

Investors believe that the industries representing the best investment opportunities over the next several years are technology (73%), healthcare/biotech (62%) and real estate (38%), Janus Henderson reported. 

Investors reported they are clearly concerned about the threats artificial intelligence (AI) poses, especially financial exploitation. Those who use an advisor said that 45% of advisors have already provided them with resources to help avoid financial fraud, while 29% said they would like their advisor to provide these resources.

Nearly three-in-four investors (73%) think AI “greatly increases the risk of financial exploitation, with 56% reporting that they are very or somewhat concerned that they or a loved one could fall victim to financial exploitation. Millennials (66%) and members of Generation X (63%) are more likely to be concerned about financial fraud than Baby Boomers (48%) or members of the Silent Generation (43%),” the survey found.

Investors satisfaction with their financial advisor is soaring, Janus Henderson said.

Among investors working with a financial advisor, “67% are very satisfied and 31% are somewhat satisfied with their relationship.  Notably, when advisors address emotional needs, client satisfaction improves,” the survey found.

Topping investors’ list of characteristics they associate with a higher level of satisfaction from their advisor are the following:

• 79% of advisor clients said their “advisor provides peace of mind that I'm on track to reach my goals.”
• 72% said their advisor “cares about me as a person, beyond just my financial situation.”
• 65% said their advisor provides financial education.

Nearly half of investors with advisors (42%) report their advisor is aged 50 years or older, according to the survey.

On the topic of what their advisor will do with clients and accounts when he or she retires, less than half said their advisor had addressed succession planning, “while 25% did not know their advisor’s plans but would be interested in learning more, and the remaining 32% did not see the need to address this topic,” the survey found.

 “Growth-oriented financial advisors should view the challenges facing investors in this era of elevated uncertainty as an opportunity to strengthen their value proposition,” Sommer said. “Clearly, client satisfaction rates are very high among advised investors, however, with many advisors closing in on retirement, those who are able to build trust and differentiate themselves based on providing better client experiences will be rewarded.”