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My firm’s CEO, Melissa Sauter, lives by the motto, “fail to plan, plan to fail,” and encourages her employees to do so as well. Based on life’s often harsh lessons around preparation, “fail to plan, plan to fail” seems to resonate with most people, including affluent investors, as more than half (58%) report having a financial plan and another one in five (19%) is currently working on one.

However, 17% of investors with at least $100,000 in investable assets admit to not having started to make a financial plan, including about one in five investors ages 54 to 62, arguably beyond the ideal time to already have a financial plan in place.

Financial planning is the act of creating a plan where you establish a set of goals in your life and figure out how much money it will take to achieve them. This involves saving money, investing, and getting insurance to protect you and your loved ones. It also includes having legal documents created in the event of an emergency so that your family is prepared.

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With Super Bowl LII behind us, the professional football season of 2017–2018 is over but a tremendous amount of loyalty remains among New England Patriots and Philadelphia Eagles fans. One doesn’t have to spend too long watching an NFL game to witness what loyal fans will do to cheer on their team in the pouring rain, sub-zero temperatures, or near-whiteout snowfall. The feeling of support and allegiance from fans for their teams is palpable.

What drives fan loyalty? The team, an individual player, the coach, the owner or various combinations of all of the above. Influence on loyalty from a combination of factors also holds true for investors working with advisors and other investment professionals and their respective firms. In fact, the industry average loyalty to an investment firm among advised investors is substantially higher than among the overall affluent investor population, indicating that the inclusion of a financial advisor or other type of investment professional offering advice is key to client loyalty, referrals and retention. Continue reading →

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Use of advice leads to stronger trust in the industry

While many industry insiders feared the worst, financial advisors actually fared very well over the past year—a year filled with threats of the Department of Labor (DOL) fiduciary rule casting doubt on the industry overall as well as creating intense scrutiny on fees. In research earlier this year, we observed financial advisors were feeling positive about the intention of the fiduciary rule but also concerned about the implementation potentially damaging their reputation among investors. Remarkably, quite the opposite occurred.

While many advisory firms moved forward with changes in how advisors provide financial planning and communicate guidance, especially with respect to IRAs, only about one-third of affluent American investors became aware of the fiduciary rule. Among those familiar with the rule, most reported their impression of advisors was unchanged and an additional 27% cited that their perception of advisors had actually improved, evidence that preparation efforts toward compliance with the rule were not in vain, even amid the extensions and delays recently announced with fiduciary rule efforts.

Perhaps most telling is the level of trust in the investment community among affluent investors working with financial advisors, as it is significantly higher compared with prior years. In fact, more affluent investors have turned to a financial advisor in 2017 as a trusted source of investment. Continue reading →