Wealthy Investors Take More Advice

Respondents to the third Nationwide Financial Survey said they wanted more from financial planning help than just the traditional assistance with risk-and-return decisions.

Similar to 2001, 74% of the high-income professionals said they were motivated to begin financial planning because they weren’t sure they were properly preparing financially for retirement. Some 64% said they had seen people not prepare and therefore struggle in retirement.

Some 67% said planning for retirement was the most important thing they could get from a financial advisor.

Needing Advice

In comparison to the 2001 survey, when it came to their stepped-up need for financial advisors:

• respondents said they wanted more financial education in general,
• 45% said information about financial markets was a very or extremely important service provided by an advisor, up from 36%,
• 43% said they keenly awaited data on new financial products, up from 37%,
• respondents placed greater emphasis on planning for unexpected market downturns, and
• nearly 70% said they ran their own financial research past their advisor, up 4%

Meeting of Minds

The survey also indicated that high-income professionals are consulting a greater number of sources for financial advice than last year:

• 70% met with a professional investment advisor in 2002, up from 54% in 2001,
• 54% consulted a stockbroker or national investing firm, up from 32%,
• 50% of respondents met with their accountants in 2002, compared to 22% the previous year,
• some 23% brought their financial materials to a lawyer, up from 13%,
• 18% met with a banker, up from 7%, and
• 27% consulted an insurance agent, up from 7% the year before

Frustrated

Survey results suggest a new frustration with products most directly associated with stock market performance, such as mutual funds, stocks, and money market accounts. Respondents’ positive impression of these products decreased from last year by as much as 10%.

However, positive impressions of products with protection features, such as income annuities, fixed annuities and whole life insurance, increased by up to 10%.

The survey polled 500 people with annual household incomes greater than $150,000 per year. Respondents were younger than age 60 and were either engaged in financial planning or intending to be involved in it in the near future.