Only 41% of Americans Use a Financial Advisor-And Most Younger Adults Shun the Professionals

Source of Financial Information and Advice By Age Group 18-29 30-49 50-64 65+ Friends and Family 57% 50% 33% 33% Financial Websites 42% 43% 31% 23% Social Media 42% 24% 10% 4% Banks and Credit Unions 34% 35% 31% 27% Books 30% 26% 13% 8% Financial Advisors 27% 40% 45% 51%
Gallup also found that the higher a household’s income, the more likely they are to use a financial advisor. For example, only 20% of those with a household income of less than $48,000 use financial advisors/planners, compared to 54% of those making at least $90,000.
Factors like comfort using technology may play a role, but the generational divide also likely correlates with how wealth changes over time.
It’s easier to manage basic investments when you’re younger and have fewer assets, said Craig Copeland, director of wealth benefits research with the Employee Benefit Research Institute (EBRI). However, as you accumulate assets and approach retirement age, there will likely be more opportunities for a financial advisor, such as assistance with transitioning into retirement and managing the transition from growing investments to spending down your portfolio, he added.
Why People Choose to Work With a Financial Advisor
People may turn to financial advisors for various reasons. For one, those with lower asset levels might not have as complicated financial needs now, but having a foundation in place could help as you accumulate wealth over time.
EBRI research found similar results to Gallup, with 37% using an advisor, but among those who don’t, nearly half said they expect to work with a professional in the future.
The top reason workers seek help from an advisor is to determine if they’re saving enough for retirement, with 49% also wanting to know how to save and invest more for retirement outside of their workplace plan.
Advisors can also help with more niche areas. About 27% of workers seek professional help from an advisor to reduce debt, as well as to create a will or estate plan. One-quarter of workers also turn to advisors for help with life insurance.
While there are many other ways to get help with these types of areas, such as through friends and family, who are often the first source for most, it’s challenging to rely on what non-professionals tell you.