Have you ever thought about who takes advantage of financial advisory services? Or how different generations of investors will be more likely to use these types of services in the future? Some adults may not be using financial advisors to their advantage at this time, but evidence shows more investors may be getting on board in the near future.
In a recent study by D.A. Davidson, two-thirds (67%) of surveyed individuals with debt are not planning to refinance or consolidate their debt in the next year. The study goes on to say that by not refinancing, these individuals could be missing an important savings opportunity amid the current economic and interest rate environment. It’s possible that people are unaware that they can refinance their debt, or that they are aware but are unsure of how to do it or whether it’s the right thing to do. That’s where a financial advisor comes in. The study showed that 50% of those with debt who work with an advisor are making this consideration.
Knowing how to tackle debt is one thing, but fully understanding the ongoing changes in the market is another. According to the survey, 72% of people claim to do just that. Of the 72%, 77% of men feel like they fully understand the impact that rising rates and inflation can have on their personal finances, while only 67% of women feel this way. To break that down further, its seems like the older you are, the more likely you are to understand the impact these forces have on your personal finance. So, which age group claims to understand this the best? It’s the Baby Boomers. Here’s how the numbers break down:
- Baby Boomers: 79%
- Gen X: 70%
- Millennials: 69%
- Gen Z: 62%
Even though each group feels like they understand the impact, the majority of respondents don’t feel the need to budget for rising inflation.
While having financial goals and laying out a plan to meet those goals may be a no-brainer for some, more than half (51%) of the respondents shared that they did not have a written financial plan last year. Somewhat surprisingly, the results show that younger generations are more likely to create a written financial plan.
- Gen X: 67%
- Millennials: 59%
- Gen X: 43%
- Baby Boomers: 37%
At the end of the day, this study shows that there are plenty of opportunities out there for financial advisors. While nearly 75% of respondents say they aren’t currently working with a financial advisor, about 33% stated that they are considering doing so in 2022.
To review D.A. Davidson’s full breakdown of the survey results, click here.