Wed, 27 July 2022 | financial planning
According to the Northwestern Mutual 2022 Planning & Progress Study, more than 62% of Americans (62%) believe their financial planning is in need of improvement. However, only 35% of Americans seek out financial advice.
Data also showed a trend that shows a large number of people recognize the importance of seeking help in the near future. This is a trend that has been evident for the past two years. Nearly one-fifth (18%) of Americans say that they did not have an advisor prior to the COVID-19 pandemic. However, they have either started working with someone or are planning to.
"These numbers have some clear silver linings," stated Tim Gerend (executive vice president and chief distributor officer at Northwestern Mutual). "Despite the fact that Americans are not receiving financial assistance, we saw an increase in people seeking professional advice last year. These numbers have remained stable over 2022 and are not expected to drop back to pre-pandemic levels."
The data also shows that younger adults value professional advice. Three quarters of Gen Z and Millennials believe their financial planning needs to be improved. They are also the most likely generation to say that they did not work with an advisor prior to the pandemic, but have now started to do so or plan on doing so.
|
All US Adults Age 18+ |
Gen Z |
Millennials | |
|
Improvements are needed in financial planning |
62 % |
74 % |
74 % |
|
Talk to an advisor |
35 % |
30 % |
40 % |
|
Pre-pandemic, I didn't have an advisor but now do / will |
18 % |
29 % |
24 % |
The study found that people who have an advisor save more than those who do it on their own. Eighty percent (80%) of people who seek professional assistance claim that they were able build their savings during the pandemic. Only half of those who did not consult an advisor were able save more.
Financial Uncertainty and the Price
According to the 2022 Planning & Progress Study, people who are dealing with financial uncertainty report that it has an impact on their health, work performance, and relationships. The following issues are reported by respondents:
The study also examined levels of certainty in a wide range of factors, including finances, found that respondents with advisors feel more secure than those who don't work with them. The discrepancies in certainty ratings were striking when people were asked to rate them on a scale from 1-100.
|
|
Don't work
|
With
|
Differential
|
|
Your current housing situation is stable |
62.7 |
80.8 |
+18.1 |
|
Your ability to manage your debt levels |
60.6 |
80.3 |
+19.7 |
|
Your ability to pay for healthcare |
57.8 |
77.7 |
+19.9 |
|
Stability of your job situation/career |
57.2 |
76.2 |
+19 |
|
Your ability to attain long-term financial security |
55.1 |
76.7 |
+21.6 |
|
Retirement planning |
54.6 |
77.5 |
+22.9 |
|
Unplanned financial emergencies can be paid for by your ability to pay |
52.9 |
77.6 |
+24.7 |
|
All-round certainty |
57.2 |
78 |
+20.8 |
Gerend stated that there are many factors that can impact the level of stability and security people feel in their life. A trusted advisor can be a tremendous help, both from an emotional and practical perspective. This applies to all ages and situations.
The 2022 Planning & Progress Study, which will include data sets in the future, will examine wide-ranging issues facing Americans, including savings and debt, retirement and work, planning, priorities, and many other topics.
Source: Northwestern Mutual