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Fidelity Measures Advisors’ Impact Through Financial Crisis

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The financial crisis has had a measurable effect on investors, but advisors have as well, a report released Wednesday by Fidelity found.

Surveying investors who are at least sophisticated enough to have more than simply a savings account or certificate of deposit, Fidelity found that those who used an advisor felt more prepared both before and after the crisis, and were more likely to say the economy has improved from where it was five years ago.

GfK Public Affairs and Corporate Communication polled 1,154 household decisionmakers over 25 for the survey on behalf of Fidelity. 

Nearly half of respondents who work with an advisor said they felt prepared before the crisis began in 2008, compared with 37% of those without an advisor. Two-thirds of those with an advisor said they felt prepared after the crisis, compared with 53% of those without.

During the crisis, advisors were indispensable to their clients. They were the leading source of financial guidance, which was rated as most helpful by 90% of respondents with an advisor. Nearly a quarter of respondents rely on their advisor now more than ever.

“The financial crisis created an opportunity for financial professionals to provide much needed context and clarity to investors,” Scott Couto, president of Fidelity Financial Advisor Solutions, said in a statement. “While investors are feeling more engaged and accountable for their finances, many are still too conservatively allocated. Financial professionals have an opportunity to help investors regain confidence with taking on an appropriate amount of risk to meet their financial goals.”

When asked where the blame lay for the financial crisis, respondents were split between banks and lenders, and Americans who overextended themselves. However, 56% recognize that saving for retirement is their responsibility. To that end, 42% have increased their contributions to their retirement accounts and 64% said they were interested in guaranteed income products like annuities, more so than they were before the recession.

“Emerging from the depths of the crisis, many investors found resolve and started taking control of their personal economy,” Kathleen Murphy, president of personal investing at Fidelity Investments, said in a statement. “Whether it was increasing contribution rates to a 401(k) or IRA, adjusting asset allocation or increasing the frequency of financial discussions with family, the silver lining of this crisis is that it spurred investors to reassess and take action to improve their finances.”


Read Does Fiduciary Coverage for 401(k) Rollovers Lie Ahead? on AdvisorOne.