8 Ways Advisor Clients Feel More Confident

Sixty-two percent of Americans say they need to improve their financial planning, including 74% each of millennials and Generation Z, according to a study released Wednesday by Northwestern Mutual.

Only 35% of study participants, however, currently engage with a financial advisor. The study found significant differences in outcomes on financial and other matters between those with and those without an advisor. It found several areas in which respondents who had one felt more confident.

The study findings were not entirely bleak, according to Tim Gerend, chief distribution officer at Northwestern Mutual. 

“Despite the fact that too many Americans are still not getting financial help, we saw a spike last year in the number of people seeking professional advice and those numbers have held stable in 2022 rather than sliding back to pre-pandemic levels,” Gerend said in a statement.

The study results showed that 18% of respondents who did not work with an advisor before the onset of the pandemic do so now or plan to do so, including 24% of millennials and 29% of Gen Z.

Among people who work with a professional, 80% said they were able to build their savings during the pandemic, compared with 49% of those who do not work with an advisor.

The Harris Poll conducted an online survey in mid-February among 2,381 U.S. adults.

The Price of Financial Uncertainty

Northwestern Mutual’s study found that people faced with financial uncertainty said it affects their health, job performance, relationships and more. Respondents reported that had experienced these things at least once a month because of financial uncertainty:

• Makes them feel depressed: 36%.
• Keeps them up at night: 34%.
• Affects relationship with spouse/partner: 28%.
• Causes them to miss out on social events and opportunities: 28%.
• Creates issues with friends or other family members: 26%.
• Makes them physically ill: 24%.
• Affects job performance: 24%.

How Advice Helps

The study also looked beyond respondents’ finances to a broad range of factors. It found that those who work with an advisor feel more solidly grounded across the board than those who do not. 

Asked to rate their certainty levels on a scale of 1 to 100, those with and those without an advisor expressed these levels of certainty:

1. Stability of your current housing situation: advisor, 80.8% vs. no advisor, 62.7%.
2. Ability to manage your level of debt: 80.3% vs. 60.6%.
3. Ability to afford health care: 77.7% vs. 57.8%.
4. Stability of your employment situation/career: 76.2% vs. 57.2%.
5. Ability to achieve long-term financial security: 76.7% vs. 55.1%.
6. Ability to plan for retirement: 77.5% vs. 54.6%.
7. Ability to pay for an unplanned financial emergency: 77.6% vs. 52.9%.
8. Overall certainty: 78% vs. 57.2%.

“Clearly, a range of factors impact the stability and certainty people feel in their lives,” Gerend said. “But a good, trusted advisor can be an enormous help from a practical and emotional perspective, and that extends to people across all ages and circumstances.”