More than 1/3 of American consumers don’t believe they have a strong understanding;
Survey gauges what advisors do and what Americans think they do
PHILADELPHIA, PA–(Marketwired – May 9, 2016) – More than 1-in-3 Americans (36 percent) said they don’t have a strong understanding of what a financial advisor does, according to a survey conducted online in April by Harris Poll on behalf of the McAdam Advisory firm.
The survey also exposed key knowledge gaps between what Americans think financial advisors do and the roles that they actually play. Only about one third of Americans (34 percent) believe financial advisors help people evaluate career decisions, while only 19 percent believe that financial advisors help clients navigate through personal relationship issues.
Even among individuals who said they had a strong understanding of what a financial advisor does, there was a lack of understanding about a number of factors.
Only 36 percent of those individuals said financial advisors help clients evaluate career decisions, and only 21 percent said financial advisors help clients navigate through personal relationship issues.
Meanwhile, one in three (34 percent) said they did not think that financial advisors helped clients navigate through life changes (e.g. getting married, having a baby, new job) and one in five (20 percent) said they did not think financial advisors helped clients keep more of the money they make.
A more ‘holistic’ view of the client
“The term ‘financial advisor’ can be inadequate because though we deal primarily with our clients’ finances, we need to have a full understanding of their larger life goals and their personal issues in order to advise them effectively,” said Michael McAdam, CEO of McAdam. “When someone changes careers or jobs, those are decisions that have a financial component and advisors can give guidance on what those decisions will mean financially. Similarly, personal struggles like divorce impact finances. That’s why we’ve made both personal and professional considerations a key part of our Advanced Advisory Model.”
A recent study by the American Psychological Association looked at the relationship between money, stress and relationships. It highlighted money as a major source of conflict in relationships between adults1.
“Relationships and finance may not appear to go hand-in-hand, but we deal with foundational relationship issues all the time when we meet with clients,” said Phil Simonides, CFP, Group Vice President at McAdam. “In estate planning, it’s very common for people to want to pass down money on their own terms. We often find ourselves in the position of helping them balance what they want to happen with what will make their loved ones happy.”
The McAdam survey of 2,143 U.S. adults revealed several areas in which Americans doubt that financial advisors can help. Other findings included:
- Putting the Financial in Financial Advice- A strong majority of Americans believe that financial advisors help clients plan for retirement (91 percent) and select investments (90 percent)
- Millennial Misunderstandings- Among Millennials (ages 18-34), 46 percent do not believe they have a strong understanding of what a financial advisor does, compared to 31 percent of their older counterparts that say they do not have a strong understanding of what a financial advisor does
- Lifetime Learning Curve- There is a 19 percentage point difference among those that believe they have a strong understanding of what a financial advisor does from ages 18-34 (54 percent) to ages 65+ (73 percent)
This survey was conducted online within the United States by Harris Poll on behalf of McAdam, LLC from April 4-6, 2016 among 2,143 adults ages 18 and older, among which 1,361 believe they have a strong understanding of what a financial advisor does. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. Survey respondents were given examples for the following prompts: financial advisors help clients decide which investments to select (e.g., stocks, bonds) and financial advisors help clients navigate through life changes (e.g., getting married, having a baby, new job). For complete survey methodology, including weighting variables, please contact [email protected].
About McAdam, LLC
McAdam is an independent financial advisory firm with a nationwide network of more than 200 advisors operating out of five offices in Philadelphia, Chicago, Boston, Tysons Corner and Jersey City. McAdam has developed an advisory model known as its Advanced Advisory Model™. This model integrates all three areas of financial planning: the financial, the personal — and the professional, to help McAdam’s clients achieve their goals. With the firm’s advanced knowledge and deep experience they help professionals make informed decisions and provide a new level of clarity and control.
Please remember that past performance may not be indicative of future results. McAdam is neither a law firm nor a certified public accounting firm and no portion of the newsletter content should be construed as legal or accounting advice. A copy of McAdam’s current written disclosure statement discussing its advisory services and fees is available upon request. If you are a McAdam client, please remember to contact McAdam, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing, evaluating or revising our previous recommendations or services.