Financial Advisers Key to Spending and Saving Confidence

Two-thirds of Americans who work with a financial adviser believe they know how much to spend now and to save for the future.

Northwestern Mutual’s 2018 Planning & Progress Study found that 67% of Americans who work with a financial adviser believe they know how much to spend now and to save for the future. By comparison, this is true for only 44% of those without an adviser.

Thirty-four percent of those without an adviser say they are “not at all confident” they have the balance between spending and saving correct. This is true for only 13% of those with an adviser. Sixty percent of those without an adviser say debt reduction is a top priority, while 37% of those with an adviser say the same.

“Financial decision-making can be overwhelming, especially when juggling a number of competing priorities,” says Sandy Botcher, vice president of distribution at Northwestern Mutual. “A financial adviser has the expertise and objectivity to see the whole picture and develop a strategy that’s flexible enough to enjoy life today while securing tomorrow.”

The study also found that 54% of those with an adviser say they feel very financially secure. By comparison, this is true for only 21% of those without an adviser. Seventy-five percent of those with advisers say they are disciplined or very disciplined financial planners, relative to just 37% of those without an adviser.

Additionally, 59% of those with an adviser believe that if they work past traditional retirement age, it will be by choice rather than necessity. By comparison, 61% of those without an adviser think they will work past retirement age due to necessity.

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Seventy percent of those with an adviser think their plan can endure market cycles, whereas only 29% of those without an adviser share the same opinion.

Harris Poll conducted the online survey of 2,003 adults for Northwestern Mutual in March.

Former State Street Executive Convicted of Defrauding Transition Management Customers

The SEC's complaint alleges that the former executive led a scheme to add secret commissions to securities trades performed for at least six clients of State Street's transition management business, which helps institutional clients move their investments between asset managers or otherwise restructure large investment portfolios.

A jury in the U.S. District Court for the District of Massachusetts convicted Ross McLellan, a former State Street Corp. executive, of engaging in a scheme to defraud customers of State Street’s Transition Management line of business.

McLellan was found guilty of applying secret commissions to billions of dollars of securities trades executed on behalf of these customers, the Securities and Exchange Commission (SEC) announced.

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In a statement to PLANSPONSOR, a State Street spokesperson said: “We entered into settlements in 2014 with the UK Financial Conduct Authority and in 2017 with the Department of Justice (DOJ) and Securities and Exchange Commission (SEC) relating to the overcharging of transition management clients in 2010 and 2011. We deeply regret that this occurred, accept responsibility for the actions of our former employees, and since the overcharging was discovered have substantially enhanced our controls. We are fully cooperating with the United States Attorney’s Office for the District of Massachusetts and the Department of Justice in connection with this matter.”

The SEC’s complaint alleges that between February 2010 and September 2011 McLellan led a scheme to add secret commissions to securities trades performed for at least six clients of State Street’s transition management business, which helps institutional clients move their investments between asset managers or otherwise restructure large investment portfolios. The complaint further alleges that these commissions were charged in addition to fees the clients had expressly agreed to pay the bank, and that McLellan took steps to conceal the commissions from the clients and others within State Street.

More information about the litigation is here.

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