The majority of U.S. consumers are looking for guidance on how to put their money to work. Whether it's advice on buying crypto or help developing a full-blown financial plan, several recent surveys have revealed that investors want help, but they struggle to find good sources for information.
In a February survey of more than 2,000 adults in the U.S., intelliflo, a technology platform for financial advisors, looked at respondents’ attitudes and behaviors related to financial advice. The survey shows that the majority have a desire to connect with good financial advice, but settle for informal information instead.
Consumers avoid paying for financial advice
In intelliflo's survey, 71% of Gen Zers (ages 18 to 25) and 72% of millennials (ages 26 to 41) agreed that they want advice on certain financial topics. But that same number of respondents also admitted that they don't know how to get the advice they need.
When asked to name the top barrier that prevents them from seeking out a financial advisor, respondents stated that they don't think they have enough money to hire someone (35%).
Based on survey results, It's uncertain if respondents have a clear idea of the cost of hiring a registered financial advisor. For some, the cost could be less than what they'd pay for popular splurge items, such as devices and technology, or holiday shopping budgets, which doubled by as much as $1,000 this past year.
While there is no set dollar amount for working with a financial advisor, it may be more affordable than investors think. Advisors may be paid on an hourly basis, or they may receive commissions or simply charge a flat fee. Often that fee is a percentage of the value of your investments, generally between 1% to 2% per year.
Most investors turn to family and the internet for financial advice
Investors may not be turning to advisors en masse, but they're still seeking financial information. When asked where they go for advice, here's what respondents said:
- 52% turn to family
- 41% go to digital sources/online
- 32% turn to registered financial advisors
Social media has proven a popular source for financial information in recent surveys. In a November survey from NAPFA (National Association of Personal Financial Advisors), one-third of respondents said they use social media for financial advice. In that group, YouTube was named as the most popular social media platform, with 71% of millennials and 63% of Gen Zers saying they use it for financial information.
In the intelliflo survey, respondents who trust digital sources said they go to social media platforms (15%), blogs or vlogs (7%), podcasts (10%) and other online sources (27%) for financial advice.
How can you find a good financial advisor?
Working with a financial professional isn't the only way to get financial guidance, but the right advisor can be a valuable resource, and may be more affordable than consumers think.
For those looking to find a financial advisor in your area, NAPFA recommends finding a fiduciary who is paid on a "fee-only" basis (note, this is not the same as "fee-based"), since these advisors are required to offer advice based on your best interest rather than selling you specific products to earn a commission . The Consumer Financial Protection Bureau (CFPB) also offers a guide, with questions you can ask upfront to choose the right financial advisor.
For someone who'd rather go an alternative route, robo-advisors can give automated advice through apps or web platforms. Their advice is based on your income, assets, goals and other information you provide. Some robo-advisors also include limited access to a live professional. These services generally come with an advisory fee of around 0.25%, however it's important to look into other fees that may be involved with the service before signing up.
Methodology: This survey was conducted online within the United States by The Harris Poll on behalf of intelliflo from Feb. 17-22, 2022, among 2,067 U.S. adults ages 18 and older. Generations were defined as follows: