Many investors feel they are not planning sufficiently for their financial future and even less are working with a financial advisor, meaning opportunities abound for an advisor in the current economic climate, according to a Northwestern Mutual study released today.

Sixty-six percent of the 2,740 investors surveyed for the study said they need to improve their financial planning, but only 37% said they have a financial advisor, which means many investors could be turning to advisors for help, said Tim Gerend, executive vice president and chief distribution officer at Milwaukee-based Northwestern Mutual.

“It could reflect that people are not getting the level of comprehensive advice that they really want and need,” he said. “I think there is a gap between what people want and what they’re getting, but I think the fundamental point here is people need help.”

The younger generations are the ones saying they need help the most, the study found. Four out of five millennials and members of Generation Z said their financial planning needs improvement, according to Gerend. Advisors should take note of that statistic, he said.

“Hopefully, that’s a wake-up call for the industry that it’s not all about high-net-worth clients, not all about the baby boomers or people in retirement,” he said. “There is a huge opportunity with millennials and Gen Zers who know that they need to take steps to get their financial houses in order and plan for the future that they want.”

There are other positives advisors can take from the study, he said, including the high level of trust respondents have in their advisor. Overall, 31% of those surveyed said they trusted their financial advisor more than a family member, a friend or a financial influence or social media when it comes to financial advice.

Members of the older generations—baby boomers and Generation X—were more trustful than millennials and Generation Z, the study found. Thirty-five percent of the older generations said they trusted their advisor, copmpared with 25% of millennials and 22% of Generation Z.

All the generations varied dramatically on what they are looking for in an advisor.

Baby boomers and Generation X prioritize individuals with expertise that they do not have, as 66% of baby boomers and 50% of Generation X listed that as their top advisor quality. Meanwhile, 47% of millennials said they are looking for someone who helps them plan and stay on track to their plan, while 39% of Generation Z want someone who will keep them up to date on matters such as the tax code.

“That speaks exactly to the market opportunities for advisors,” Gerend said.

Fifty-four percent of respondents with an advisor said they selected advisors because they understood the priorities of the investor at their stage in life.

The respondents' secondary priorities differed by generation.

For Generation X and baby boomers, a long track record of experience was important, as 58% of each said selected that option. The younger generations also ranked experience high on their lists, but they also care more about how an advisor uses technology. 

Twenty-five percent of Generation Z and 29% of millennials said they chose an advisor because they are tech-forward and willing to use that technology to communicate outside of in-person meetings. Only 18% of baby boomers and 16% of Generation X said that technology prowess was the reason they chose their advisor.

“People want ease of use and to enhance the relationship with the advisor while adding convenience,” Gerend said. “I think the digital investment for advisors and clients are critical for future success and relevance.”