Affluent investors still remain conservative in their approach to investing this year, despite the fact that they feel financially better off than a year ago. According to the latest Merrill Lynch Affluent Insights Quarterly, 39 percent of affluent Americans described themselves as having a low investment risk tolerance.

“While they believe the future may be getting brighter, many still struggle with the financial tug of war between near-term demands and future goals,” said Sallie Krawcheck, president of Bank of America Global Wealth and Investment Management, in a statement.

While 78 percent said they’re more confident that their financial situation will improve over the next year, the survey found that financial uncertainty still lingers. In fact, one in five indicated they had to use long-term savings and investments to cover short-term financial needs. Respondents said they dipped into this savings to cover regularly monthly expenses (35 percent), pay off excess debt (27 percent), and make up for a loss in income within the family (19 percent).

Despite the uncertainty, however, investors said they’re happy with their financial advisor, with 84 percent sticking with the same wealth management firm during the last year. The top reason for staying has been their relationship with their financial advisor (64 percent), ahead of the 30 percent who felt positive investment performance was important.

“The expectation is that [advisors are] still doing all the things they’re traditionally known for from an investing perspective, but there is also a need as well as a growing expectation for them to serve more as a financial life coach for every area of their clients’ financial life, such as spending, debt and health care,” said Lyle LaMothe, head of U.S. wealth management at Merrill Lynch Wealth Management.

When asked what they intend to do with their cash, 33 percent of the 1,000 individuals with investable assets of $250,000 or more who responded to the survey said they plan to keep it in interest bearing accounts, while 23 percent hope to invest their cash.

Affluent investors are also more conservative in how they spend their money, with more than one-third spending less than they were a year ago. Twenty-seven percent are cutting back on luxury items and recreational activities, while 23 percent are spending less and/or more closely managing day-to-day expenses. Instead of buying luxury items and electronics for their children for the upcoming holidays, the most popular gifts are a financial investment or a cash gift as the popular gifts.

“We’re seeing in the data that the affluent have perhaps become a bit more grounded and realistic as a result of the recent recession,” LaMothe said.

Other top concerns among respondents included the rising cost of health care (60 percent), ensuring retirement assets will last into their future (57 percent), and being able to afford the lifestyle they want in retirement (51 percent). The number of respondents expecting to push back their retirement jumped this quarter, with 61 percent expecting to retire later than planned compared to 29 percent in January 2010.

Pending tax reform was another concern, with half worried about its impact in 2011 and beyond. However, 60 percent are taking action to prepare for tax reform, with many meeting with their financial advisor (31 percent), meeting with their CPA (15 percent), and maximizing their retirement contributions (15 percent).