Globalization may have come slowly to the U.S., but it seems to have finally arrived. According to a recent article in Financial Planning Magazine, investors are open to thinking about cross-border securities:
A nationwide survey of mass-affluent investors conducted in August by Allianz Global Investors Distributors and GfK Roper found that most (71%) are looking for the best investment, and they don’t really care if that investment is foreign or domestic.
It seems that the trend toward global tactical asset allocation (Go Global Macro, Go!) and international investing may just be picking up steam. Clients also shouldn’t overlook that many domestic equities have significant overseas exposure. Right now the U.S. equity market is still the largest in the world, but that may change over the next generation or two.
Although investors are open to foreign securities, are they really ready for it? After all, because our domestic market is so deep, it’s quite possible to be fairly diversified without ever going outside our market—something that might not be true if, for example, you lived in Belgium. On the other hand, perhaps Belgians are used to thinking in global terms. Americans are not.
…when it comes to international investing, the survey also points to a huge educational need: Two-thirds of investors (67%) admitted they lack knowledge about investing overseas and more than half (54%) said they wanted to learn more.
So there is your challenge and your opportunity in a nutshell. Investors are interested but they are going to need your help. The advisor who is willing to show the client global investment products and bring them up the learning curve may do very well indeed.
