Julia Johnston-Ketterer

About Julia Johnston-Ketterer

Julia Johnston-Ketterer is a senior director in the Syndicated Research division. She has more than 15 years of experience leading research initiatives on the client- and supply-sides of the financial services industry focusing on investors, advisors and broker-dealers. Prior to joining Market Strategies, Julia was vice president of business development for Market Probe, Inc. and research associate for Richard Day Research, where she managed financial services clients and conducted client satisfaction studies and PR research programs. Julia also spent ten years at Fidelity Investments. While there, she built a research team that provided primary and secondary research to internal marketing and communications partners. Julia earned an MBA in finance and communications from Simmons School of Management and a bachelor’s degree in French and international relations from the University of Wisconsin-Madison. While she can claim having twice bungee-jumped in New Zealand, Julia’s current adventures outside of work include being a hockey mom, taking hikes with her dog and planning her next family beach vacation.

Financial Planning Games: Financial Advisors Compete Head-to-head with Planning Websites

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My firm’s CEO, Melissa Sauter, lives by the motto, “fail to plan, plan to fail,” and encourages her employees to do so as well. Based on life’s often harsh lessons around preparation, “fail to plan, plan to fail” seems to resonate with most people, including affluent investors, as more than half (58%) report having a financial plan and another one in five (19%) is currently working on one.

However, 17% of investors with at least $100,000 in investable assets admit to not having started to make a financial plan, including about one in five investors ages 54 to 62, arguably beyond the ideal time to already have a financial plan in place.

Financial planning is the act of creating a plan where you establish a set of goals in your life and figure out how much money it will take to achieve them. This involves saving money, investing, and getting insurance to protect you and your loved ones. It also includes having legal documents created in the event of an emergency so that your family is prepared.

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Investing Is Not a “One Emotion” Sport

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Pre-retirees Express Uncertainty and Hope in Q2 2018

Most parents can attest that raising children is not a “one emotion” sport. The anticipation and joy of witnessing a child reach a milestone like starting kindergarten is often combined with feelings of sadness over the completion the toddler years. The same phenomenon occurs with investing. More often than not, investors report a mix of sometimes conflicting emotions

Global consternation over trade between the US and China coupled with tensions between the US and Russia caused a bumpy start to the second quarter of 2018, instilling feelings of uncertainty and anxiety among affluent investors. Sentiment shifted more toward hope and optimism in May with positive news about the lowest unemployment rate in 18 years and strong Q1 earnings. However, news of the Federal Reserve raising rates and the pace of US GDP growth being the slowest since 2013 overshadowed a more than 3% gain from the S&P 500 for the quarter, to which investors reacted with a mix of uncertainty and hope.

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The Reason Many DC Participant Communication Programs Fail

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In their effort to develop effective participant communication strategies, plan providers need to serve multiple audiences. Participant education needs can vary by generation, investment knowledge, wealth or income level, marital status and even gender. Yet one facet many participant communication professionals don’t consider is intentwhether the individual participant is planning to make a change to his or her retirement plan account. Depending on their level of intent, participants will either require more specific information to inform their upcoming decision, or content that validates their current retirement saving strategies or motivates necessary changes.

Who Are “Ready-to-act” Participants?

Ready-to-act (RTA) Participants are those who are planning to make a change to their current employer-sponsored retirement plan in the near future. And they are few and far between. Our most recent DC Participant Planscape™ survey found that only one in six participants intends to make a change to his or her plan investments and even fewer (13%) are likely to increase their contribution amount in the near future. RTA Participants are more likely to be male, younger (Millennial or Gen X) and use advice to manage their investment portfolios. In fact, half of RTA Participants planning to make an investment change are working with a financial advisor. Conversely, Not Ready-to-act Participants, those who do not anticipate making changes to their retirement plan accounts, are much more likely to be self-directed, managing their investments without any professional assistance. Continue reading

Don’t Go Changing Self-directed Investors

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DIY Investors Live in a Constant State of Uncertainty and That’s OK

A client recently commented to me that self-directed investors are more challenging to serve. Representing only one-third of all affluent investors, these do-it-yourselfers neither work with traditional financial advisors nor use advice from other sources including distributors and asset managers. A look at investor sentiment during the market volatility in Q1 2018 sheds some light on key differences in the self-directed investor’s mindset compared with the traditionally advised (those currently working with a financial advisor).

Overall, affluent investors started 2018 with optimism and hope in the current investing environment. Yet concern about inflation and the impact of trade sanctions began in late January. Financial advisors, asset managers and distributors all dusted off and updated their market volatility messaging and outreach in anticipation of negative market action. Following February’s 10% correction in the S&P 500 Index and the VIX reaching a peak of 37 for only the second time in the past five years, investors ended the first quarter with far less optimism. In fact, the top-cited emotion in March was uncertainty along with a significant increase in fear. Continue reading

Uncertain Optimism: Investors React to a “Too Good to Be True” Q4

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Investors React to a “Too Good to be True” Quarter

Measuring Investor Sentiment During a Period of Unprecedented Growth

My father-in-law had a saying, “If something is too good to be true, it is.” Yet the last quarter of 2017, which in many ways seemed unbelievable, really did occur. During this time, all-time stock market highs became commonplace and the US economy continued to pick up momentum. 637,000 jobs were added and the term “full employment” was quoted in the media with virtual champagne corks popping in the background. Consumer confidence reached a high not observed since the start of this century, and the CBOE Volatility Index, or VIX, hit an all-time low since its inception in 1993.

Throughout the fourth quarter of 2017, uncertainty levels dropped and investors became increasingly hopeful and optimistic. Confidence was highest in November while, despite political and social events, anxiety and fear remained largely at bay. As the new year approached, hope and optimism became the leading emotions expressed by investors toward the market. Continue reading

Loyalty Has Benefits On and Off the Field

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With Super Bowl LII behind us, the professional football season of 2017–2018 is over but a tremendous amount of loyalty remains among New England Patriots and Philadelphia Eagles fans. One doesn’t have to spend too long watching an NFL game to witness what loyal fans will do to cheer on their team in the pouring rain, sub-zero temperatures, or near-whiteout snowfall. The feeling of support and allegiance from fans for their teams is palpable.

What drives fan loyalty? The team, an individual player, the coach, the owner or various combinations of all of the above. Influence on loyalty from a combination of factors also holds true for investors working with advisors and other investment professionals and their respective firms. In fact, the industry average loyalty to an investment firm among advised investors is substantially higher than among the overall affluent investor population, indicating that the inclusion of a financial advisor or other type of investment professional offering advice is key to client loyalty, referrals and retention. Continue reading

Advisors Win in Aftermath of DOL Fiduciary Rule

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Advisors Win in Aftermath of DOL Fiduciary Rule

Use of advice leads to stronger trust in the industry

While many industry insiders feared the worst, financial advisors actually fared very well over the past year—a year filled with threats of the Department of Labor (DOL) fiduciary rule casting doubt on the industry overall as well as creating intense scrutiny on fees. In research earlier this year, we observed financial advisors were feeling positive about the intention of the fiduciary rule but also concerned about the implementation potentially damaging their reputation among investors. Remarkably, quite the opposite occurred.

While many advisory firms moved forward with changes in how advisors provide financial planning and communicate guidance, especially with respect to IRAs, only about one-third of affluent American investors became aware of the fiduciary rule. Among those familiar with the rule, most reported their impression of advisors was unchanged and an additional 27% cited that their perception of advisors had actually improved, evidence that preparation efforts toward compliance with the rule were not in vain, even amid the extensions and delays recently announced with fiduciary rule efforts.

Perhaps most telling is the level of trust in the investment community among affluent investors working with financial advisors, as it is significantly higher compared with prior years. In fact, more affluent investors have turned to a financial advisor in 2017 as a trusted source of investment. Continue reading

How to Expand Traditional Banking Relationships

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How to Expand Traditional Banking Relationships

Opportunity Lies with IRAs and the Younger Generations

National and regional banks are facing a big challenge in establishing themselves in the wealth management industry—even among their best, most affluent bank customers. Although it would seem to be a natural extension of banks’ offerings, fewer than 20% of affluent investors would even consider their primary bank for wealth management products and services. Moreover, banks claim an average of just 20% of the total assets from the few customers who would consider them for wealth management offerings, so there is ample opportunity for wallet expansion among banks’ current client base.

To dive deeper into potential opportunity, we asked affluent investors how likely they would be to consider their primary bank for a list of wealth management product and services. Nearly one in five would consider opening an IRA with their primary bank. This positions IRAs as a gateway for aspiring banks to move traditional banking customers into their wealth management businesses and obtain a greater percentage of their customers’ overall assets.

Highlighting an opportunity to target further, significantly more affluent Millennials and Gen Xers are likely to consider their primary bank for wealth management products and services than not. Targeting these younger generations through their preferred digital platforms will give banks an edge and the potential boost to consideration from these investors. Continue reading

Retirement Assets On the Move

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Who is Rolling Money Over and How to Target Them

Here is one more reason for financial services firms to target Millennials: 50% are likely to roll money out of plans with former employers into an IRA in the next year.

In fact, only one in four (27%) Millennials intend to leave his or her retirement savings in previous employer plans, compared with 38% of Gen Xers and at least half of Baby Boomer and Silent Generation investors. Half of Millennials are likely to roll the money into an IRA, while an additional 24% anticipate consolidating assets in their current employer’s plan. Continue reading

Bridging the Gap in Financial Wellness

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Bridging the Gap in Financial Wellness | Cogent Reports

As financial wellness programs gain popularity, questions arise about how to design an effective program that works for the employee and the employer. It was just a few years ago that these programs began to emerge as an employee benefit designed to help employees struggling with aspects of managing household finances. While only 16% of all DC plan sponsors currently offer a financial wellness program, 38% are likely to consider such an offering in the near future. As many employers begin to recognize that a financially secure workforce is both more productive and more motivated, they are increasingly looking to offer their employees additional support with personal finances—but what does that mean when building out a financial wellness program?

As popularity grows, providers must keep the goals of plan sponsors and participants in mind when deciding what components to build into these nascent financial wellness offerings. The most common components of current financial wellness programs according to plan sponsors are online access and guidance on health savings accounts or HSAs. Contrast this with the employee perspective. When asked about which employer offering would be helpful when making decisions about household finances, plan participants cite online tools and access to a financial advisor or coach most often. Notably, plan participants prioritize credit score guidance and discounted bank accounts over HSA guidance, highlighting the focus on “here-and-now” household finances and not longer-term additional savings required to cover health costs during retirement. Continue reading