Of those who have received advice, 77 percent wish they had met with an advisor sooner; Perceived lack of savings still stops people from getting help
NEW YORK (Oct 3, 2016) – When it comes to meeting with a professional financial advisor, the earlier the better, according to the 2016 TIAA Advice Matters Survey.
Fifty-nine percent of American adults say that a first meeting with an advisor should take place before age 35 – and that figure jumps to 80 percent among Gen Y respondents.
With 77 percent of all respondents who have received financial advice saying they wish they had done so sooner, it’s clear that Americans see the advantage of getting professional counsel early in their careers.
However, a perceived lack of savings often prevents individuals from getting the financial advice they may need. Thirty-five percent of Americans who haven’t worked with a professional financial advisor say the primary reason they have not done so is because they don’t have enough money to invest. In fact, almost half (49 percent) of Americans think they need more than $50,000 in savings to justify meeting with a professional financial advisor – similar to the 45 percent of Americans who felt the same way last year.
“You don’t need a minimum amount of money to receive professional financial advice,” said Kathie Andrade, CEO of TIAA’s Retail Financial Services business. “An array of effective online tools and resources give everyone access to personal financial support. And finding a financial advisor early in your adult years – perhaps through your parents or employer – can help put you on a path for financial success.”
Gap Between Interest and Action
Despite the fact that only 48 percent of Americans have received professional financial advice, many more (71 percent) are interested in getting advice. The gap between interest and action is even larger among certain groups: 45 percent of Gen Y respondents have received advice, but 82 percent are interested; 30 percent of respondents with an annual income of less than $50,000 have received advice, though 61 percent are interested.
Customized counsel may encourage more individuals to seek advice, according to the survey. Eighty-five percent of respondents say they would find advice designed specifically for their age group to be helpful, while 73 percent of women say the same about advice tailored for and delivered by women. Personal support could help narrow the advice gender gap – only 40 percent of women have received professional financial advice, compared to 56 percent of men.
Milestone events also may prompt Americans to seek professional financial advice, such as retirement (41 percent), receiving an inheritance (32 percent), preparing to purchase or sell a home (30 percent) and planning for a child or grandchild’s college education (20 percent).
“A big event often encourages people to get financial advice, but you don’t need to have a milestone in your life to reach out for professional financial support,” Andrade said. “You can get valuable perspective on day-to-day financial matters, like creating a budget, determining your insurance needs or making charitable donations, whether face-to-face with an advisor or through online tools.”
What else might motivate more individuals to start working with an advisor?
- 29 percent say they would be more likely to consider working with a professional financial advisor if they had a clear understanding of how they would be charged for advice.
- 24 percent point toward a recommendation from friends or family.
- 22 percent would look for assurance that the advisor is qualified to help them.
- 20 percent would want assurances that the advisor would not try to sell them any particular product, service or investment.
The opportunity to streamline finances also may prompt more Americans to get financial advice: 84 percent would like to work with an advisor whose company can handle both their investments and banking needs.
Investment advice and saving for retirement outside of a workplace retirement plan are the top two topics that Americans would like to discuss with a financial advisor, but topics vary by income levels. The survey found that individuals with an annual income of less than $50,000 are less likely than those with an annual income of more than $100,000 to seek investment advice (30 percent compared to 49 percent), but they are more likely to be interested in creating a budget (34 percent versus 21 percent). However, Americans of all income levels are equally likely to be interested in advice on creating monthly income they can’t outlive (29 percent among all respondents).
Advice Can Help Employers Attract Talent
Employers can play a key role in helping individuals access the financial advice they need – while helping companies attract and retain talent. Three in four Americans say they would be more likely to consider a job if it offered no-cost financial advice as part of a benefits package. That figure increases to 87 percent among Gen Y members.
And when asked to select among various free perks an employer could offer, advice was the most popular choice. Thirty-three percent say they would like access to a no-cost financial advisor, compared to 17 percent who prefer on-site medical care and 12 percent who want free lunch prepared by an on-site chef.
Though nearly half (48 percent) of those who have worked with a financial advisor chose one not affiliated with their employers, the tide seems to be shifting. Sixty-four percent of baby boomers who have received professional financial advice say they worked with a non-employer-affiliated advisor, but that figure drops to 27 percent among Gen Y respondents.
“Gen Y really wants financial advice, and companies are doing their best to attract top young talent. So it makes sense for employers to add advice to their benefits,” Andrade said. “Pairing a well-designed retirement plan with strong education and support can go a long way in helping companies attract well-qualified employees and set them on the path to success.”
The survey was conducted by KRC Research online among 1,000 adults, age 18 years and older living in the United States, from Aug. 10 to Aug. 15, 2016. The sample was proportionally obtained by demographics such as age, gender, region and income to ensure reliable and accurate representation of the national population age 18 and older.
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2 Based on assets under management across Nuveen Investments affiliates and TIAA investment management teams.