Two-thirds of American adults in a Northwestern Mutual study released Monday acknowledged that their financial planning needs improvement, including 79% of both Generation Z and millennials. Respondents said having a financial advisor bolsters confidence, yet only 37% work with one.
One factor driving this result could be the current economic landscape, Northwestern Mutual said. Eighteen percent of survey participants said recent economic uncertainty has led them to either begin working with a financial advisor or plan to do so.
The research showed that people who work with an advisor have significantly higher levels of confidence across a range of areas, including being prepared for unplanned expenses, being able to retire and achieving long-term financial security.
“Financial uncertainty is up in 2023, and the question for many Americans is what to do about it,” Tim Gerend, chief distribution officer at Northwestern Mutual, said in a statement. “The good news is many are taking action to plan and tapping advisors for help in an increasingly complex financial environment so that they can reach their goals.”
The Harris Poll conducted the study between Feb. 13 and March 2 among 2,740 U.S. adults.
Most Trusted Source for Financial Advice
Thirty-one percent of respondents said financial advisors are the source of financial advice they most trust, far ahead of other sources:
- Spouses: 17%
- Family members: 14%
- Business news: 8%
- Friends: 4%
- Social media: 3%
Although younger generations may spend a significant amount of time on social networks, the vast majority do not turn to those channels for trustworthy financial guidance, according to the survey. Millennials ranked financial advisors as their most trusted source for financial advice, while Gen Zers ranked advisors second only to family members.
(The findings of a recent Morningstar survey on who advisors trust weren’t so clear cut.)
“FinTok and meme stocks inspired many young people to get excited about building wealth, but it’s clear that they are turning to advisors for advice they can trust,” Gerend said. “At Northwestern Mutual, the average age of our new clients is 32, and we see the enthusiasm these generations have for working with an advisor to create wealth and protect it from risks.”