More than half of Americans feel financial advisors put their companies’ interests above clients’, but they also are using financial advisors now more than in the past, according to a survey released Thursday by the Certified Financial Planner Board of Standards Inc.
The CFP Board’s 2015 survey of Americans’ perceptions of the U.S. economy and advisors shows a growing awareness of a need for advisors, but also reflects a belief that the government needs to take additional action to protect American investors. A similar survey was conducted in 2010.
According to the survey, 60 percent of the 1,002 respondents feel advisors put their companies’ interests first, while only 12 percent think they put the clients’ interests first. At the same time, 41 percent feel advisors have become more important over the last five years.
Consumers’ use of financial advisors has increased significantly in the last five years from 28 percent in 2010 to 40 percent in 2015, with 70 percent of those using an advisor saying they work with a CFP professional, the survey says.
Ninety percent of consumers say that when they receive investment advice from a financial advisor, the person providing the advice should put the consumer’s interest ahead of their own and that the advisor should be required to tell consumers about any conflicts of interest that could potentially influence the advice.
However, 63 percent believe the current laws do not protect consumers from those who would take advantage of them. Forty-four percent say that Congress and regulators have done “little” of what needs to be done to protect consumers, while 33 percent say “nothing has been done.” Seventy percent agree that financial advisors should be regulated to protect investors and build consumer confidence in financial services.
Conducted over the summer before the uptick in stock market volatility in August, the survey shows that consumer views of the economy and personal finances have changed over the past five years. Respondents are less optimistic now about the future of the U.S. economy than they were five years ago (34 percent said the economy would improve over the next six months while 44 percent said so in 2010). But more believe they are better financially prepared for the future now than in 2010 (73 percent versus 64 percent).
“This research shows that Americans have more faith in financial advisors and want to work with someone who will put the consumer’s interests first,” says Rich Rojeck, chair of CFP Board’s board of directors.