Nearly two-thirds (65%) of business owners changed their retirement plans in the past 12 months and almost all (95%) business owners have concerns when it comes to achieving their financial goalsTD Wealth’s Retirement Readiness survey examines business owners’ views on financial planning and retirement, and this year’s survey revealed that third-party advice is paramount in ensuring retirement confidence and better financial outcomes, as well as how business owners continue to seek autonomy and flexibility in how they invest, when they invest and what they invest in.
CHERRY HILL, NJ and NEW YORK, NY, January 11, 2023 – An annual survey of third-party business owners reveals that inflation and supply chain issues negatively impacted business owners’ retirement plans in the past 12 months, forcing many to re-evaluate their business plans and seek financial planning advice from professionals.
Over half (54%) of business owners surveyed report that their business has been negatively impacted by inflation and supply chain problems in the last year. As a result, nearly one-third (31%) of owners have considered moving the location of or selling their business to offset rising costs.
“Record inflation and supply chain troubles have presented significant challenges for business owners, and while both show signs of improvement, the impacts will be felt into 2023. Business owners are depending on registered financial professionals to weather short-term volatility and help with the long-term success of their financial plans,” said James Beam, SVP, Head of Investment Management, Brokerage, Planning, Retirement & Strategy.
More than three-quarters (77%) of those surveyed who work with a financial advisor and considered moving or selling their business reported that they consulted their financial advisor about these actions. Further, nearly all (96%) business owners with a financial advisor are satisfied with their advisor’s performance.
External Threats Pose a Risk to Retirement Confidence
Almost all (95%) business owners surveyed have concerns when it comes to achieving their financial goals. Inflation emerged as the top concern (63%), closely followed by economic uncertainty (56%) as rising interest rates and the threat of a recession force business owners to re-evaluate their financial and retirement plans.
Nearly two-thirds (65%) of business owners surveyed changed their retirement plans in the past 12 months, including changing their asset allocation (31%), postponing retirement (30%) and lowering contributions toward their retirement (30%). Business owners aged 18-34 (70%) and 35-54 (74%) were more likely to amend their retirement plans compared to older business owners aged 55+ (50%).
Despite the challenging economic conditions, 90% of business owners are confident that their retirement savings will generate the income that they are planning to live on.
Business Owners Find Value in Advice
82% of business owners report working with a financial advisor, helping to improve confidence in financial and retirement planning amid today’s environment of elevated inflation and slowing growth. According to the survey, confidence in reaching retirement goals is higher among those who work with a financial advisor (83% compared to 75% of those without a financial advisor). Further, 43% of business owners who work with a financial advisor say they have communicated more frequently with their advisor in the past year.
Amid turbulent market conditions, business owners are turning to new investment vehicles to find returns and are looking to their advisors for guidance. 63% of business owners report exploring a new investment opportunity for their retirement portfolio, including digital assets (43%), private markets (40%) and environmental, social and governance-focused investments (30%). Among business owners who work with a financial advisor and have explored new investment opportunities, 80% received these investment recommendations from their advisor. Additionally, “ideas for new investment opportunities” was cited as the number one most useful piece of content from financial advisors among owners who work with them.
“In a time where investors have a greater say in what they invest in, how they invest and who they invest with, financial advisors need to showcase their value. Despite the rise of automatic investing platforms, our survey shows that investors still find new investment vehicle recommendations from their advisor to be a commodity,” said Alyson Klug, Head of U.S. Wealth National Sales, TD Bank. “Investors are looking to their advisors for help meeting their financial goals and are exploring new opportunities to do so, demonstrating that there is still value in working with a financial advisor.”
Further, the survey demonstrates that business owners continue to seek autonomy and flexibility for their personal investments, with over half (53%) of all owners reporting that they used an automatic investing platform in 2022, including 40% who had used an automatic investing platform prior to 2022. Over half of all owners (57%) express satisfaction with the automatic investing platform they are using.
TD Wealth® commissioned Big Village to conduct an online survey targeting business owners with more than one employee and household investable assets of $100,000 or more with the objective of finding out about their retirement plans and the future of their business. The sample of business owners from around the nation was sourced through Big Village partners and was fielded in August 2022. A total of 724 responses were collected. Respondents were members of an online panel and had agreed to participate in online surveys and polls. The results of the TD Wealth® survey do not represent any position of TD Wealth® or describe services, offerings and other financial products available through TD Wealth.®
About TD Wealth
TD Wealth® is a business of TD Bank, N.A. (Member FDIC). TD Wealth® provides banking and non-banking services. Banking, investment and trust services are available through TD Bank, N.A. (TD Bank). Investment advisory and brokerage products are available through TD Private Client Wealth LLC, a US Securities and Exchange Commission registered investment adviser and broker-dealer and member FINRA/SIPC (TDPCW). TD Bank and TDPCW do not provide legal, tax or accounting advice. You must consult with your legal, tax and accounting advice.
About Big Village
Big Village is a global advertising, technology, and data company. Driven by our diverse group of experts, we provide a new way of working by bringing programmatic solutions, media, insights, and creative all under one roof. Big Village is headquartered in New York and has 12 offices across North America, Europe, and Australia. Find out more at https://big-village.com/.