Eight in 10 Americans have never hired a financial planner, and four in 10 of those say it’s because they are capable of managing their finances on their own, according to a recently released study commissioned by Million Dollar Round Table (MDRT) and conducted online by Harris Poll.
However, many Americans who have hired a financial professional report feeling confident at the sight of complex financial terminology such as long-term care insurance (41%), Roth IRA (69%) and annuities (49%).
While roughly half of Americans who have never hired a financial professional feel confident with traditional terms such as “life insurance” (51%) and “401(k)” (52%), the proportion of those who feel confident drops when it comes to more complex areas such as “long-term care insurance” (31%), “Roth IRA” (42%) and “annuities” (28%).
“These results further emphasize the importance of planning for a healthy financial future,” said Mark J. Hanna, CLU, ChFC, MDRT President. He says consumers should consider working with an advisor like hiring a professional builder to renovate a home. “While you may be able to paint the walls on your own, your overall knowledge wouldn’t enable you to replace your pipes or build new cabinets in your kitchen.”
Of the Americans who have never hired a professional, less than half (46%) have a retirement plan or emergency fund, only 19% have a long-term financial plan for the future and 46% have life insurance. This is in contrast to the 21% who have hired a financial planner, in which 77% have a retirement plan or emergency fund, half have a long-term financial plan for the future and 63% have life insurance (see infographic below).
Among those who have never hired a financial professional, when asked why:
- 44% say they don’t have enough assets or money to need one
- 38% say they are capable of managing their own finances
- 36% say it would cost too much money
More than one-third (36%) of employed Millennials (ages 18-34) whose company offers a 401(k) or pension plan are not participating in it, despite last year’s MDRT survey findings that the average millennial expects to retire at a younger age than other generations.
“Working with a financial professional gives you a resource for deeper understanding of financial terminology and planning capabilities, ensuring you protect yourself and your family with a well-rounded plan,” said Hanna.
View MDRT’s full study results at this link to learn why consumer confidence in financial planning is key.
Survey Methodology: This survey was conducted online within the U.S. by Harris Poll on behalf of MDRT from Feb. 6-8, 2017 among 2,202 U.S. adults ages 18 and older, among whom 490 have hired a financial planner and 1,712 have not. 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 Emily Bunce at [email protected]
About MDRT: This year MDRT celebrates its 90th year of delivering innovative ideas and generating empowered growth as the internationally recognized standard of excellence in life insurance and financial services. Founded in 1927, the Million Dollar Round Table (MDRT), The Premier Association of Financial Professionals®, is a global, independent association of more than 49,500 of the world’s leading life insurance and financial services professionals from more than 500 companies in 70 nations and territories. MDRT members demonstrate exceptional professional knowledge, strict ethical conduct and outstanding client service. MDRT membership is recognized internationally as the standard of excellence in the life insurance and financial services business. For more information, please visit mdrt.org and follow them on Twitter @MDRtweet.
