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.

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

Fact-Based Trends from Cogent Reports™    

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

When Volatility Is Positive

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Sentiment toward the Investment Environment Is More Volatile among Ready-to-act Investors … and That Is Good News for the Financial Services Industry

While volatility is generally not well received in the money management industry, in the case of investor sentiment, volatility signals a level of engagement from investors who are likely to make an investment move in the near future. This increase in engagement makes it easier for asset managers and distributors to connect with these ready-to-act investors, who are closely monitoring the impact of both political and financial market events.

Volatile investor sentiment also represents an opportunity for asset managers and distributors to reach an already engaged audience at a time when many firms are facing the challenges of record-low trust levels, decreasing brand awareness and low brand differentiation among affluent investors. Put simply, conducting any type of outreach with an engaged client or prospect is comparatively easier than getting the attention of someone who is focused elsewhere. The key lies in knowing how to harness the power of investor engagement to bring in new business.

In order to gauge investor sentiment and monitor important changes over time, Cogent includes a series of questions in our monthly Cogent Beat Investor survey. Respondents are asked to identify how they feel “right now” about the current investment environment. Later in that same survey, we identify the investors who are planning to open an investment account in the next three months, letting us isolate investors who are “ready to act.” When comparing investor sentiment during the 2016 presidential election cycle—perhaps one of the most unpredictable periods in recent US history—among ready-to-act investors and investors who don’t plan to open an investment account in the near future, some interesting findings popped.

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The Rules of Engagement

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External forces confronting the 401(k) industry including the Department of Labor fiduciary rule, provider consolidation due to pricing pressure, and the heavy volume of litigation over excessive fees continue to push plan sponsors to hone in on cost reduction and reevaluate expenses related to all aspects of plan administration and investments. Yet managing plan costs is just one of the two top challenges facing plan sponsors—plan sponsors are equally focused on the daunting task of adequately preparing participants for retirement.

Not shying away from the ultimate charge of participant retirement preparedness, plan sponsors are thinking creatively about how to better engage with employees. No longer content with automatic plan features that encourage inaction, more plans are now offering an employee match while others are extending beyond the 401(k) plan to a more holistic level of overall financial wellness. This broader approach takes more immediate needs such as credit card debt and student loans into account, thus providing a more realistic perspective for employees on their own role in retirement savings. Continue reading

Retirement Trends: Plan Sponsors Focus on Financial Wellness

Fact-Based Trends From Cogent Reports™    

Plan sponsors are increasingly looking for ways to encourage employee engagement with the 401(k) plan. This year two trends are rising to the top. Compared with previous years, more plans are providing employer matching contributions, thus providing an immediate incentive for participants who actively contribute to the plan. In addition, a relatively new trend shows nearly four in ten employers are considering a financial wellness program to help employees address more immediate financial priorities. In fact, the interest in financial wellness programs far outweighs interest in automatic plan features that are more narrowly focused on retirement accumulation as the end goal.

Overall, just 16% of plan sponsors currently offer a financial wellness program for their employees. But importantly, nearly four in ten (38%) say they are likely to consider adding such a program in the future. A view by plan size reveals that the larger employers are leading the charge, as more than one-third (36%) of Large-Mega plans currently offer a financial wellness program. Yet interest in adding a financial wellness program is relatively strong and consistent across plan size segments, with 37% of Micro plans, 43% of Small-Mid plans and 44% of Large-Mega plans open to considering this level of assistance for their employees. These findings suggest that the opportunity to strengthen client relationships is greatest for providers and advisors who think holistically about the financial health and security of the employees they serve. Continue reading

As DOL Fiduciary Rule Sits on Ice, Is It Thumbs Up or Thumbs Down for Advisors?

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While the Debate Continues, the Upside of the Ruling Lies With the Investor

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Whether the Department of Labor (DOL) fiduciary rule continues to be delayed, eventually takes effect or ends up being repealed, the proverbial beans have been spilled, as many advisors and their respective firms have already taken the actions needed to comply, thus proving some areas of debate true and others false.

Here are the facts: more than one-quarter (27%) of all affluent investors and over one-third (36%) of advised investors—those currently working with a financial advisor—are now familiar with the DOL fiduciary rule, which expands the definition of an investment advice fiduciary. Among those who are familiar, most (74%) have taken action in the form of talking to their financial advisors, reading about the topic online, discussing the ruling with friends and family and/or reviewing the fees paid for the investments they own. Yet, only 4% have considered changing advisors, debunking the myth that the fiduciary rule has the potential to impose heavy churn on advisors’ client base, and suggesting that there’s more than meets the eye to the investor-advisor relationship. Continue reading