Some aspect of talking to a financial adviser scares about three-quarters of Americans (71%), according to new research released by McAdam, an independent financial planning firm. The survey revealed a number of other concerns and fears that Americans have about talking to or meeting with financial advisers. Nearly half (47%) said they were hesitant to trust a financial adviser with their personal financial information. More than four in 10 (41%) said they were concerned that a financial adviser would not be able to help them with their finances.
Cost was cited as the top concern, with nearly half of survey respondents (49%) saying they were scared that talking to an adviser would end up costing them “a lot of money.” In other words, a gap exists between people’s comfort level in dealing with financial advisers and their need for financial advice.
The anxiety that could be preventing people from meeting with an adviser is unfortunate, McAdam points out, since most people are falling short of retirement goals. The report cites statistics from the Employee Benefit Research Institute for the median amount of 401(k) balances (just $18,433) and data from the Society of Actuaries on the percentage of the population that meet with a financial adviser (50%).NEXT: Educating investors on the big picture.
Financial advice is often available to people at reasonable rates, according to Phil Simonides, group vice president at McAdam, especially when compared with other services they routinely pay for. “Given the complex nature of long-term financial planning, investors should take a big-picture view of the value they receive for these services,” he says.
Across the board, Millennials (ages 18 to 34) tend to be more wary of financial advisers, at 82% expressing anxiety, compared with those 45 and older (63%).
Even those with higher incomes are concerned about the cost of meeting with a financial adviser. Nearly half of those with household incomes of $100,000 or more (44% ) said they feared talking to a financial adviser would cost a lot of money. More than a third (38%) said that they were afraid that a financial adviser would give them bad news about the state of their finances.
Since some effects of the financial crisis are still felt, some investors may be understandably wary of the financial planning process, points out Michael McAdam, chief executive of McAdam, who suggests advisers get the word out that meeting with an adviser can significantly improve people’s financial state.
McAdam, with offices in Philadelphia; Chicago, Boston; Tysons Corner, Virginia; and Jersey City, New Jersey, is an independent financial advisory firm with a nationwide network.
Harris Poll conducted research online on behalf of McAdam from October 13 to October 15, among 2,009 adults ages 18 and older.