New findings show that most clients are in favor of the latest Department of Labor (DOL) fiduciary rule.
The survey from AARP, which questioned 1,002 adults ages 50 and older, found that 66% of participants strongly agree that when giving investment advice to people with retirement savings, financial professionals must give advice that is in the best interest of the account holders. Conversely, 24% of clients say they “somewhat agree” with the rule, while 4% “somewhat disagree” and 5% “strongly disagree.”
Not only do a majority of participants approve of the proposal, but well over half say they would be willing to vote out a member of Congress if they tried to overturn it. When asked how it would affect their likelihood of voting for a politician in the next election, should a member of Congress try to reverse a rule that required financial professionals to provide advice in the best interest of clients, 66% said they would be less likely to vote for them. On the other hand, 15% say they would be more likely to vote for them, while 19% say it would have no effect on their voting likelihoods.
The strong approval for the rule stems from the fact that of those who use financial advice, almost all expect their advisor to provide guidance suited directly for the client and understand that they should. According to the survey, over half (53%) of participants know that their advisor is required to give them advice in their best interest. Moreover, 89% of participants say they expect the advice to be given in their best interest, compared to just 3% who say they do not.
In return, 87% of these clients say they use the advice to make important financial decisions.
Retirement advice still not a priority for many
Despite strong sentiments from clients, AARP’s study finds a sizable gap within those who utilize financial professionals and those who do not. According to the findings, 62% of participants say they do not utilize a financial advisor to help plan for retirement, compared to 38% who do.
These participants aren’t likely to change within the next years, either: 54% do not expect to use a financial professional within the next five years, compared to 29% who do.
When asked why they had never used an advisor for retirement planning, 41% feel more comfortable “handling it” themselves, 35% noted not having much retirement savings, and 30% do not believe they can afford a financial professional. Twenty percent are still skeptical of advisors, 17% do not feel comfortable working with a professional, and 16% said they don’t understand how an advisor could help them.
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