Even as more investors seek out professional financial advice, gaps within the industry continue to exist, highlights new research from Hearts & Wallets.
The firm’s latest report, Pain Points & Actions 2024: Today’s Top Advice Gaps & the Customer Loyalty Connection, based findings from a Hearts & Wallet Investor Quantitative Database, and found that many ranked “choosing appropriate investments” as the top responsibility they struggle with.
Sixty percent of U.S. households sought professional help on one financial task in 2024—a 15% increase compared to figures a decade ago, found Hearts & Wallets. Among those with “three-plus tasks,” responsibilities that may include understanding how to fund expenses, developing a financial plan for short and long-term goals, and estimating or budgeting spending for retirement, 33% inquired about professional financial advice, up from 17% in 2013.
Those who requested help for five or more financial tasks were likelier to mix professional advice with online resources, with Gen Z and Millennial advice seekers just as likely to use financial advisors and online tools.
“Financial services firms should expect consumers to have clusters of difficulties, rather than single tasks or questions,” Laura Varas, Hearts & Wallets CEO and founder, said in a statement. “Prepare to help with these multiple difficulties and tell customers and prospects that you can. That’s a powerful promise.”
In fact, customers who receive guidance on more than one task were twice as likely to refer family, friends, and colleagues to a professional. “To improve customer experiences, close advice gaps and earn the customer loyalty premium, firms should focus on building capabilities to address the tasks that specific lifestage and asset segments find difficult,” Beth Krettecos, Hearts & Wallets subject matter expert, said.
Hearts & Wallets listed out the largest advice gaps among investors, including estate planning, “handling market volatility emotionally,” Roth conversions, buying/selling specific securities, balancing goals, and required minimum distributions (RMDs).
Among households, most voted “choosing appropriate investments” and “handling market volatility emotionally” as their top advice gaps, followed by “planning to balance my short- and long-term goals.” Retirees with $1 million to under $10 million in retirement assets said their leading advice goals is understanding a “strategy to withdraw income from multiple accounts.”
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.
