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Visualizing the Top Investments Used by Financial Advisors



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Visualizing the Top Investments Used by Financial Advisors

The Top Investments Used by Financial Advisors

This was originally posted on Advisor Channel. Sign up to the free mailing list to get beautiful visualizations on financial markets that help advisors and their clients.

Today, financial advisors are re-evaluating how they build client portfolios as the economic environment evolves.

Following a decade of historically low interest rates, the U.S. economy is now characterized by higher interest rates, driven by inflationary pressures. This has been met with stronger bond returns and a more cautious view on stocks as companies face steeper borrowing costs.

This graphic shows the top investments used by advisors, based on a 2023 Journal of Financial Planning survey.

Top Investments in 2023

Below, we show the most common types of investments advisors used or recommended to their clients this year:

Investment Type20232019
Exchange-Traded Funds (ETFs)90%88%
Cash and Equivalents76%80%
Mutual Funds*64%70%
Individual Stocks51%54%
Individual Bonds47%42%
ESG Funds35%26%
Separately Managed Accounts33%26%
Fixed Annuities31%23%
Variable Annuities30%26%
Mutual Fund Wrap Programs27%32%
Fixed Permanent Life Insurance Products26%24%
Private Equity Funds23%12%
Variable Permanent
Life Insurance
Indexed Annuities22%15%
Structured Products21%11%
Other Alternative Investments17%13%
Individually Traded REITs17%20%
Non-Traded REITs17%13%
Hedge Funds11%8%
Precious Metals8%5%

*Non-wrap. Numbers have been rounded.

As the above table shows, 90% of advisors use ETFs, and almost half reported they plan to increase their usage in the 12 months ahead.

Cash and equivalents, such as money market funds, were also widely used. Yet since 2019, use by advisors declined by four percentage points.

Money market funds saw a record $5.9 trillion in assets under management as of December, averaging returns of about 4.5%. Meanwhile, the S&P 500 has returned roughly 24% year-to-date and investment bonds have returned over 5%.

The use of private equity funds, which invest in privately-held companies, saw the highest increase across investment types, rising 11 percentage points as some advisors looked to alternative investments.

On the other hand, the sharpest decline was across mutual funds, falling six percentage points. Over a quarter of respondents say that they plan to decrease utilizing them in the next year.

Interestingly, 3% of advisors use cryptocurrencies with their clients. To date, Bitcoin has returned over 164%.

Advisor Views on the 60/40 Portfolio

Is the 60/40 portfolio dead?

After a rocky year in 2022, the time-honored 60% stock and 40% bond portfolio has returned 13% to date as of December. When surveyed, more advisors were confident than doubtful that it could offer similar returns compared to history.

Confidence That a 60/40 Portfolio Can Provide
Similar Returns as it Has Historically
Percent of Respondents
Very Confident16%
Somewhat Confident27%
Somewhat Doubtful14%
Very Doubtful3%

Percentages may not equal 100 due to rounding.

In fact, JP Morgan projects that a 60/40 portfolio will outperform cash by 4.1 percentage points on an annualized basis, and outpace inflation by 4.5 percentage points over the next decade.

According to their estimates, $100 in cash is forecast to grow to $133 over 10 years, while a 60/40 portfolio is projected to be worth $197.

Although the high interest rate climate has increased returns on cash, it misses out on the value of compounding offered by other types of investments over a longer horizon.

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Charted: Who Has Savings in This Economy?

Older, better-educated adults are winning the savings game, reveals a January survey by the National Opinion Research Center at the University of Chicago.



A cropped chart visualizing the percentage of respondents to the statement “I have money leftover at the end of the month” categorized by sentiment, age, and education qualifications.

Who Has Savings in This Economy?

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

Two full years of inflation have taken their toll on American households. In 2023, the country’s collective credit card debt crossed $1 trillion for the first time. So who is managing to save money in the current economic environment?

We visualize the percentage of respondents to the statement “I have money leftover at the end of the month” categorized by age and education qualifications. Data is sourced from a National Endowment for Financial Education (NEFE) report, published last month.

The survey for NEFE was conducted from January 12-14, 2024, by the National Opinion Research Center at the University of Chicago. It involved 1,222 adults aged 18+ and aimed to be representative of the U.S. population.

Older Americans Save More Than Their Younger Counterparts

General trends from this dataset indicate that as respondents get older, a higher percentage of them are able to save.

Above 6049%28%23%
All Adults39%33%27%

Note: Percentages are rounded and may not sum to 100.

Perhaps not surprisingly, those aged 60+ are the age group with the highest percentage saying they have leftover money at the end of the month. This age group spent the most time making peak earnings in their careers, are more likely to have investments, and are more likely to have paid off major expenses like a mortgage or raising a family.

The Impact of Higher Education on Earnings and Savings

Based on this survey, higher education dramatically improves one’s ability to save. Shown in the table below, those with a bachelor’s degree or higher are three times more likely to have leftover money than those without a high school diploma.

No HS Diploma18%26%56%
HS Diploma28%33%39%
Associate Degree33%31%36%
Bachelor/Higher Degree59%21%20%
All Adults39%33%27%

Note: Percentages are rounded and may not sum to 100.

As the Bureau of Labor Statistics notes, earnings improve with every level of education completed.

For example, those with a high school diploma made 25% more than those without in 2022. And as the qualifications increase, the effects keep stacking.

Meanwhile, a Federal Reserve study also found that those with more education tended to make financial decisions that contributed to building wealth, of which the first step is to save.

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