A general retirement plan market study, the 2018 the Planning & Progress Study commissioned by Northwest Mutual, surveyed 649 investors who had an advisor, and 1,271 without an advisor.
The focus of the study was more about investors’ feelings regarding their retirement planning, and how the contributions of a financial advisor affected those feelings.
The key findings of this study included:
- 84% of those with financial advisors felt confident in their planning processes, while only 52% of those without advisors felt confident in their planning. Investors with an advisor also expressed good clarity regarding their savings versus spending habits, as opposed to 44% without an advisor.
- Interestingly, the lack of “clarity” may have contributed to the ranking of top financial priorities among those surveyed. Reducing debt was the top priority by a measure of 60% to 37%, between those without advisors, and those getting advice, respectively.
- Survey participants with an advisor, by a margin of 90% to 50%, expressed a sense of financial security, over those with no advisor.
- The same disparity was seen when asked about investor discipline. Those with advisors, by a margin of 75% to 37%, felt they were disciplined investors.
- Looking to the future, 41% of those surveyed with advisors felt they might have to work past age 65 by necessity, where a majority of 61% without advisors felt the same.
- When asked about the respondents’ relationship with their advisor, and the key attribute that distinguished a “remarkable” advisor from an “acceptable” advisor, the top response (57%) noted that they trusted that their financial advisor had their best interest at heart and was not just selling product. The second highest response (36%) was that the advisor did not “judge” the investor regarding the size of the plan assets, or prior financial decisions that had been made.
- Finally, when asked about receiving investment planning advice, and the human interaction of the advisor versus a fully automated robo-investing process, 88% responded that the human interaction is critical. The combination of a personal relationship and technology was seen to be the ideal combination.
There is no doubt that a successful retirement outcome requires a plan, discipline and the knowledge to make good choices that address each individual’s long-term retirement goals.
Editor’s Note: This is an occasional feature in the NTSA Advisor. This tip is taken from the 403(b) Plan Sponsor Guide, which is being made available to school districts nationally to assist them in understanding how to improve 403(b) plan participation and savings rates to help employees achieve a comfortable and timely retirement.
The 403(b) Plan Sponsor Guide is part of the content contained in the NTSA Certified Retirement Education Specialist (CRES) materials. The NTSA Certified Retirement Education Specialist (CRES) program and designation has been developed in order to equip advisors to be qualified and available to teach the NTSA educational program, which is designed to provide teachers with the basics of planning for retirement and improve their retirement readiness. More information about CRES is available here.
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