It’s been 10 years since the financial crisis saw banks crumble, homes foreclosed on and portfolio values plummet.
And as the global community looks back on what became a worldwide calamity, the obvious question is whether today’s investors are better prepared for the next market crash.
Financial advisors believe they are.
Thanks to a change in client mentality since the Great Recession, 61% of advisors believe that investors are indeed better prepared for the next market plunge, according to a poll from Nationwide Advisory Solutions.
The advisor/client relationship has evolved since 2008 as more planners take a holistic approach and consumers want more guarantees and security, says Craig Hawley, head of Nationwide Advisory Solutions.
The survey found specifically that advisors say investors today are more likely to work with a financial professional (74%); more likely to follow their advice (90%); and, crucially, more willing to make a financial plan and stick to it (84%).
Not sticking to a plan was the undoing of many investors during the crisis. “From the late 90s to the financial crisis, there were a lot of advisors that were trying to pitch alpha, their ability to outperform, and they were sort of selling performance,” Hawley says. “Then the market crisis comes and I remember there being stories about buy-and-hold is dead. That makes no sense anymore.”