A new survey by cloud-based technology platform intelliflo shows that 59% of Americans want financial advice, but do not know how to get it. The platform — which is specifically geared toward financial advisors — found that of the 2,000 people surveyed, 71% of people aged 18-25 and 72% of respondents aged 26-41 “strongly or somewhat agree that there are financial topics they want advice on but aren’t sure how to get it.”
Further, only 1 in 3 Americans were found to turn to registered financial advisors for financial advice — more than half, about 52%, instead turn to family for financial advice. Online advice and digital sources are where 41% of respondents said they found financial advice.
Despite the apprehension against hiring a financial advisor, respondents did not indicate a belief that they did not need one. “The top barrier preventing Americans from seeking financial advice from a registered financial advisor when they want/need it is the belief that they don’t think they have enough money to hire one (35%).” While that figure is concerning, it also leaves room for more investigation.
It is a widely-held belief that one needs considerable assets before they can hire a financial advisor, but this is simply not the case. More importantly, debt is a crucial determining factor in financial planning.
Typically, advisors tend to stay away from clients who have $5,000 or more in credit card debt specifically. Other types of debt, like a mortgage or student loans, can oftentimes be acceptable depending upon the interest rate and amount of loan outstanding. Credit card debt, though, holds such high interest rates that almost no investment vehicle will ever outpace the crippling interest rate.
Investing should only be considered once disposable income is available. This means that if you have disposable income to invest with, it should be prioritized to paying off your debt first and foremost.
That being said, if your debt is manageable, you can toggle between the two — but this is a decision that only a registered financial advisor should make.People often mistakenly believe their debt is manageable when it is not, making a financial advisor even more important in your financial plan.
From there, most would be surprised how significant an impact small amounts of money can make in an investment account. Even $100 or $200 a month, compounded over the course of years, can bring large enough returns to make a difference. Financial advisors can help make sure you are putting your funds, however modest, into the right investments.
The data shows that the help would be welcome. About 68% of Americans say a personalized financial plan would be “an extremely or very important factor if they were considering a financial advisor” according to the survey.
“As evidenced by our recent survey, there is a significant need and desire for financial advice across the board, but many simply don’t know how to access it,” said Jennifer Valdez, president of Americas, intelliflo, per PR Newswire.
A good place to start looking for financial help? Your 401(k) provider. Almost all 401(k) providers, like Fidelity or Vanguard for example, have on-hand financial advisors whose job it is to make sure you are investing your money wisely. They can begin to educate you on other investment vehicles and — most importantly — make sure that investing is suitable considering your overall financial obligations.