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Retirement Planning > Saving for Retirement

Business Owners More Confident About Retirement: TD Wealth Survey

By Michael S. Fischer

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What You Need to Know

  • Maru/Matchbox fielded a survey in August, targeting business owners with investable assets over $100,000, and collected 747 responses.
  • Six in 10 business owners reported that they work with a financial advisor; many said this leads to greater confidence in their financial success in the long term.
  • Seventy-six percent of business owners reported a change in the frequency of communication with their advisor over the past year amid market volatility.

Ninety-five percent of mass affluent business owners in a recent poll expressed confidence in their financial plans’ ability to generate income needed during retirement, up from 82% in 2020, TD Wealth reported Thursday.

Likewise, a vast majority of high-net-worth business owners in the poll said they are confident that their financial plans will provide them the income they need during retirement.

Yet concerns remain amid the pandemic. Business owners said economic uncertainty and market volatility are their top concerns when it comes to achieving their financial goals this year. 

On top of that, they now worry about inflation and rising interest rates, especially as the U.S. continues to grapple with economic recovery in the wake of the pandemic.

Despite continued uncertainty, 62% of business owners reported that the pandemic did not prompt them to make any changes to their retirement planning. 

“While business owners today are concerned about the external pressures that may be potential threats to their retirement confidence, they also continue to understand that a successful path to retirement means staying the course and weathering short-term volatility for potential longer-term success,” Kenneth Thompson, head of U.S. wealth shared services at TD Bank, said in a statement.

Of those who did make changes to their retirement planning, 44% cited changes in asset allocation, 34% planned to postpone retirement and 32% lowered contributions to retirement savings.

Maru/Matchbox fielded a survey in August, targeting business owners with investable assets over $100,000, and collected 747 responses.

Hybrid Advice Boosts Retirement Confidence

Six in 10 business owners reported that they work with a financial advisor; many said this leads to greater confidence in their financial success in the long term. 

According to the survey, 55% of respondents with an advisor expressed confidence, compared with 43% of those without one.

“Financial advice moved to center stage over the past 18 months, and business owners are seeking out personalized advice and investment opportunities to meet their shifting needs,” Alyson Klug, head of U.S. wealth national sales at TD Bank, said in the statement. 

“Hybrid and digital investing solutions are table stakes for the wealth management industry, but the financial advisor is here to stay.” 

According to Klug, an increasing number of clients want to be more hands-on with their investment, but those same investors must be comfortable investing, have time to do so on their own and have the right information they need to invest.

“If any of those three pieces are missing, there is value to be found with having a financial advisor relationship to help ensure greater confidence and create a goals-based financial plan,” she said.

As business owners become confident in their retirement plans by working with a financial advisor, many are also increasing their communications with their advisors. Seventy-six percent of business owners reported a change in the frequency of communication with their advisor over the past year amid market volatility. 

Sixty-three percent of those younger than 34 said they communicated more with their advisor over the past year, compared with 26% of business owners 55 and older.

The survey also found that 43% of business owners, and 46% of those 34 and younger, use an automatic, digital investing platform, such as a robo-advisor.

Outside Advice Paramount

Business owners were not immune to the growing trend of individuals choosing to leave their place of employment for new opportunities, the survey results showed.

Forty-two percent of high-net-worth participants reported that they had lost employees because of the pandemic, compared with 37% of others. Thirty-six percent of business owners reported difficulties in hiring new employees in 2021 for these reasons:

  • COVID-19 health concerns: 64%
  • Salary/wage offering: 35%
  • Location of business: 33%

“A financial institution and advisor not only can help business owners with establishing financial goals and a long-term investment plan, but they can also act as an objective sounding board to help business owners navigate the many stages of their financial and business life cycles,” Thompson said. 

Business owners found a bright spot in outside advice. Seventy-seven percent reported that they were at least somewhat satisfied in their bank’s role in helping their business over the past year. 

Of business owners who work with a financial advisor, 82% reported that they felt supported by their advisor over the course of the past year.

(Image: Adobe Stock)

Michael S. Fischer

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