Philadelphia PA– October 26, 2015 – Nearly three quarters (71 percent) of Americans say some aspect of talking to a financial advisor scares them according to an online survey conducted by Harris Poll on behalf of McAdam, the Philadelphia-headquartered independent financial planning firm. Among their fears, adults identified cost as the top concern with nearly half (49 percent) saying that they were scared that talking to a financial advisor will “end up costing me a lot of money.”  The results of the survey point to a gap between the need for quality financial advice and the general comfort level Americans have when dealing with financial advisors.

“With the effects of the financial crisis still being felt today, some investors may be understandably wary of the financial planning process,” said Michael McAdam, CEO of McAdam.  “It’s important to recognize that meeting with an advisor can significantly improve your financial health.  We’re committed to providing education and transparency through our Advanced Advisory Model so that investors can overcome their fears and achieve their financial goals.”

According to Employee Benefit Research Institute the median amount of savings in 401(k) accounts is only $18,433.[i] The number indicates that most individuals are falling short of their retirement goals. Meanwhile, a report from the Society of Actuaries indicates that only 50 percent of people meet with a financial advisor.[ii]

“It’s particularly surprising that costs are the main fear since quality financial advice is often available to people at very reasonable costs–especially when compared to other services they routinely pay for,” said Phil Simonides, CFP, Group Vice President at McAdam.   “Given the complex nature of long-term financial planning, investors should take a big picture view of the value they receive for these services.”

The Harris Poll conducted survey of more than 2,000 U.S. adults revealed a number of other concerns and fears that Americans have about talking to, or meeting with, a financial advisor. Nearly half (47 percent) said they were hesitant to trust a financial advisor with their personal financial information. More than 4 in 10 (41 percent) said they were concerned that a financial advisor would not be able to help them with their finances. Other findings included:

  • Across the board, millennials tend to be more wary of financial advisors compared to those 45 and older. 82 percent of those 18 to 34 said they were scared about some aspect of talking with a financial advisor. Only 63 percent of those 45 and older said they were scared about some aspect of talking to a financial advisor.
  • Even those with higher incomes are concerned about the cost of meeting with a financial advisor. 44 percent of those with household incomes of $100,000 or more said they are concerned that talking to a financial advisor will cost a lot of money
  • 38 percent said that they are fearful that a financial advisor will give them bad news about the state of their finances.

“Our fears are often not based in reality,” said Simonides. “Many financial advisors are neither expensive relative to their value, nor do they only provide the bad news some people fear. The only way for people to eliminate fear is to face it head on and take the initiative to have a meeting with a financial advisor.”

Methodology
This survey was conducted online within the United States by Harris Poll on behalf of McAdam, LLC from October 13-15, 2015 among 2009 adults ages 18 and older. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables, please contact Swanczyk@gobraithwaite.com.

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 ModelTM. 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.

 

[i] http://www.ebri.org/pdf/briefspdf/EBRI_IB_408_Dec14.401(k)-update.pdf

[ii] https://www.soa.org/research/research-projects/pension/research-post-retirement-needs-and-risks.aspx