A survey from CFP Board’s 2015 survey of Americans’ perceptions on the U.S. economy and financial advisors shows a growing confidence in the need for advisors, but reflects a belief that the government needs to take additional action to protect American investors. A similar version of this survey was conducted in 2010.
The survey found that consumer use of financial advisors has increased significantly in the last five years from 28 percent in 2010 to 40 percent in 2015 with 7 in 10 indicating they work with a CFP professional.
Most respondents feel financial advisors have become more important in the last five years rather than less important (41 percent vs. 12 percent) and have hired them for better financial guidance, especially for long-term goals such as retirement.
Nine out of 10 Americans agree (with 76 percent strongly agreeing) that when they receive investment advice from a financial advisor, the person providing the advice should put the consumers’ interests ahead of theirs and should have to tell consumers up front about any conflicts of interest that could potentially influence that advice.
At the same time, a majority of respondents also believe that financial advisors act in their companies’ best interests rather than the consumers’ best interests (60 percent vs. 25 percent in 2010).
Although more people use financial advisors, a majority (63 percent) believe that current laws do not do enough to protect consumers from being taken advantage of in the financial markets.
Fully 44 percent say that Congress and regulators have done “little” of what needs to be done to protect consumers while 33 percent say “nothing has been done,” and 70 percent agree that financial advisors should be regulated to protect investors and build consumer confidence in financial services.
Conducted over the summer before the uptick in stock market volatility in August and released last week before the Financial Planning Association’s annual conference, the survey also shows that consumer views of the economy and personal finances have changed over the past five years. For example, while respondents are less optimistic now about the future of the U.S. economy with 34 percent saying the economy will improve over the next six months compared to 44 percent in 2010, they do believe they are more financially prepared for the future than in 2010 (73 percent vs. 64 percent).