Despite the superior qualities of many personal financial planners, 71% of Americans never seek them out. Why? A new study from the Society of Actuaries tells us why.
There are ten answers encapsulated in this list of Ten Barriers to Seeking Advice from Personal Financial Planners. They are:
- There is a widespread misunderstanding of the
process and value of personal financial planners.
- Non-affluent consumers tend not to trust personal financial planners who also sell products due to a perceived conflict of interest.
Consumers thereby avoid them.
- Many non-affluent consumers only seek financial advice from informal sources, such as family and friends, because they view these sources as inherently trustworthy.
- Personal financial planners often do not have the necessary social relationships and community connections to access the non-affluent market.
- There is often a cultural disconnect between personal financial planners, who are used to serving wealthy clients, and non-affluent consumers from different cultural backgrounds.
- Strong and pervasive gender norms can reduce the utilization of financial advice by couples.
- Most financial advising firms focus on affluent consumers, since the non-affluent tend to be considered less profitable and require a long-term, high-involvement investment of resources to cultivate business with them.
- The financial advice industry incentivizes its professionals to sell products more than educate consumers.
- Recent turmoil in the financial markets has significantly lowered consumers' confidence and trust in the financial services profession.
Topic: Financial Advisors
Subtopics: Introduction to Personal Financial
Value of Financial Advisors •
Retirement: The New Target
Retirement Income Industry
Retirement Income Security •
Four Tips •
Two Tips •
Four More Tips •
The Best Financial Advisors •