Financial advisors can make the difference between people feeling financially confident or feeling financially insecure, according to a Northwestern Mutual survey.
One test of financial confidence is whether people can balance their current spending needs against their need to save for the future, according to Northwestern Mutual’s 2018 Planning & Progress Study data released Wednesday.
This is a dilemma faced by many people, but 67 percent of Americans who use a financial advisor believe they have clarity on how much to spend versus how much to save, according to the survey. Only 44 percent of those without an advisor feel they have the situation in hand, according to the study, which included 2,003 people.
At the same time, only 13 percent of those with an advisor say they are not at all confident they can balance the two needs, while 34 percent of those without an advisor lack confidence completely. The rest of both groups fall between those two extremes.
Sixty percent of study participants without an advisor say debt reduction is their top financial priority, while 37 percent of those with an advisor say debt reduction is their first goal.
Reenforcing findings of the Planning & Progress Study completed in other years, the 2018 results show Americans who work with financial advisors demonstrate higher levels of retirement readiness and disciplined planning.
The study also asked what distinguishes a good advisor from a great one and the number one answer was someone the clients can trust to put the clients’ interests first. Respondents also said great advisors do not judge the client by asset size or the decisions he or she makes, and have expertise across a wide range of financial issues.
“Financial decision-making can be overwhelming, especially when juggling a number of competing priorities,” Sandy Botcher, vice president of distribution at Northwestern Mutual, said in a statement. “A financial advisor has the expertise and objectivity to see the whole picture and develop a strategy that’s flexible enough [for the client] to enjoy life today while securing tomorrow.”