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Financial Planning > Behavioral Finance

The Net Is Nice, but Humans Are Better

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Despite the growing popularity of the Internet, consumers still rely on financial planners for investment advice. That is one of the main findings of the 2002 Consumer Survey conducted by the CFP Board of Standards, Inc.

According to 996 survey respondents randomly selected from across the nation, 37% still want personalized advice from their advisors, up from 32% in 1999 when the previous study was conducted. “People feel more comfortable when they can ask questions about their financial situation and get person-appropriate responses,” comments Elaine Bedel, chairwoman of the CFP Board’s governing body. “People want some sort of validation when it comes to investing or any type of personal finance decisions, and a professional offers that.”

While 90% of consumers in the sample said they use the Internet, and 47% use it for financial advice–an increase from 35% in 1999–most investors use the Internet mainly to research company performance. The survey also indicates that few Internet users seek information about debt management, and a mere 1% use the Web to apply for loans. Almost all users reported being somewhat satisfied with the information they found. “The Internet and financial software can be valuable tools,” says Bedel. “But people don’t see them as a substitute for one-on-one advice from a professional.”

In addition, the study also revealed that men are more likely to go online for research than women–57% versus 42%. “Online information is often useful,” says Bedel. But many people recognize a need for a professional to address their individual needs and goals. “This is an interesting trend,” she adds. “It proves the Internet hasn’t truly replaced professional advice.”

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