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:

  1. Many non-affluent consumers lack the basic financial knowledge that is necessary to seek and utilize financial advice.

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  1. There is a widespread misunderstanding of the process and value of personal financial planners.
  2. 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.
  3. Many non-affluent consumers only seek financial advice from informal sources, such as family and friends, because they view these sources as inherently trustworthy.
  4. Personal financial planners often do not have the necessary social relationships and community connections to access the non-affluent market.
  5. 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.
  6. Strong and pervasive gender norms can reduce the utilization of financial advice by couples.
  7. 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.
  8. The financial advice industry incentivizes its professionals to sell products more than educate consumers.
  9. 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 Planners • Value of Financial Advisors • Retirement: The New Target • Behavioral Economists • Retirement Income Industry Association • Retirement Income Security • Four Tips • Two Tips • Four More Tips • The Best Financial Advisors • Ten Barriers

 

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Topic: Financial Advisors

Subtopics: Introduction to Personal Financial Planners • Value of Financial Advisors • Retirement: The New Target • Behavioral Economists • Retirement Income Industry Association • Retirement Income Security • Four Tips • Two Tips • Four More Tips • The Best Financial Advisors • Ten Barriers

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