A recent survey report from American United Life Insurance Company (AUL), a OneAmerica company, tells a conflicted story about workplace retirement investors. Twenty-three percent of respondents weren’t sure why they do not work with a financial professional. Others said they prefer to make their own decisions (24%), or they feel financial professionals are too expensive to hire (23%). Investors under the age of 50, as well as those with household income less than $75,000, are the most likely to go it alone.
Men and women engage with a financial professional at about the same rate overall, at 35% and 34%, respectively, according to AUL. Marsha Whitehead, vice president of marketing for retirement services for the companies of OneAmerica, says financial professionals may have greater success connecting with participants through small forums, one-on-one meetings and in ways where they can answer questions and demonstrate their expertise.
“Resources like webinars, podcasts and videos can introduce consumers to financial concepts and help them feel more comfortable seeking out a financial professional for more personalized and ongoing assistance,” she adds. “These findings underscore the importance of earning and building participants’ trust.”
To put clients at ease, financial professionals should clearly explain fee structures, the negative impacts of forgoing an advice relationship, and other basic concepts right up front, Whitehead says. Advisers need to dispel any misconceptions and keep consumers interested in learning and doing more.
The 35% of respondents who do work with financial professionals share some traits, the survey shows. For example, those who consult a financial pro are more likely to have calculated their retirement income need; 53% say they are confident or very confident about maintaining their lifestyle through retirement; and 68% of these respondents plan to continue to work with a financial professional through retirement.
“Knowing why individuals choose not to work with a financial professional and understanding the characteristics of those who do, will help us determine how to best reach out to consumers and address their concerns,” Whitehead explains. “Being ready to explain the tangible benefit of working with a financial professional is critical in helping [investors] reach retirement readiness.”
A summary infographic providing survey methodology and additional insights is available here.