When Americans were asked what they thought the best long-term investment for their money would be, the most popular choice wasn’t the stock market; rather it was real estate, according to national Bank Rate survey results posted earlier this year.
The finding makes sense because of the tangibility of houses, versus the mystery of the stock market. You can see and feel a house, but have no clue where your money is headed in the stock market, according to “Real estate is top investing choice, with stocks only tied for third, survey finds,” on Bankrate.com
A quarter of those surveyed chose real estate as the best way to invest money they wouldn’t need for more than a decade. Twenty-three percent chose the security of cash investments. And coming in at a tie for third were the stock market and precious metals or gold, each at 16%, according to BankRate.com.
The survey highlights Americans’ preferences for investing—even in a strong stock market. It also reveals a potential short-coming of financial planners, the very professionals charged with being the experts in managing Americans’ money, according to the November 19 article, “Why Combining Real Estate Expertise With Financial Planning Is A Winning Combination,”on Forbes.com by Brent Gleeson.
Gleeson wrote that while financial planners spend years in school learning about how to consult with people about personal wealth, they tend to get little advanced real estate training. That explains why financial planners might be hesitant to emphasize real estate’s role in a client’s portfolio, he wrote.
To be properly trained in and knowledgeable about real estate, a professional needs to be immersed in the real estate market daily, to keep up with changes in the fast-paced and evolving industry. So, Gleeson reasoned, the solution isn’t to add the knowledge base to what financial planners already have to know, but rather to have professionals in the two areas work together on a client’s behalf.
This new financial planning branch, called Integrated Asset Management (IAM), is gaining ground, Gleeson wrote. IAM companies put asset class professionals, including real estate experts, under the same roof as financial planners. And the experts, who work in different industries, overlap when necessary to offer high levels of expertise in important areas of investment.
There is a big need for the synergistic concept to wealth management, according to the Forbes.com article. Gleeson cited the Bankrate survey, which showed that 54 million Americans would choose real estate over stocks or bonds for long-term investment. The IAM approach is one solution because it taps real estate professionals to weigh in on real estate-related financial appropriation, risk-taking and goals’ achievement, according to Gleeson.