Investors Still Prefer Advice From Real People: Gallup

Pollsters asked those who said they receive financial information from social media whether they actively follow any social media content creators who specialize in financial advice. Half said they do follow such creators, equivalent to 10% of all U.S. adults, according to Gallup.

These findings emerged from an online survey conducted April 2-15 among 2,036 U.S. adults, using the Gallup Panel, in which respondents were asked whether they use each of 10 financial information and advice sources.

Advice in Troubled Times

Gallup noted that amid recent stock market volatility and high consumer prices, Americans are pessimistic about their finances. That makes getting good financial advice especially important.

Only 44% of Americans in a separate poll rated their personal financial situation as good or excellent, below the historical average of 50% since 2001, Gallup said. A record-high 53% said their financial situation is getting worse.

In Gallup’s new poll, 85% of participants reported taking advantage of at least one of the 10 financial advice resources. Two-thirds said they use at least one of the two human sources for information and advice, either a personal relation or a financial advisor. Seventy-three percent use one of the eight institutional or media-based sources.

Fifty-four percent of the sample use both personal and nonpersonal sources of information and advice.

Age Influences Advice Source

Americans’ sources of financial guidance vary sharply by age, the poll found. These differences partly reflect people’s need for more expert guidance as they accumulate experience and assets.

Fifty-seven percent of adults aged 18 to 29 said they rely on friends and family for advice, the highest for any age group. Young adults also report relatively high use of online sources, with about 4 in 10 each saying they use financial websites and social media. A third each cited banks or credit unions and books as their top sources.

In addition, 23% of the young cohort reported that they follow personal finance content creators on social media.

Adults in the 30-to-49 age group rely on a broader mix of sources, blending personal, digital and professional advice, according to the poll. Half cited friends and family and 43% financial websites as key sources. Forty percent said they work with financial advisors and planners.

Gallup noted that this is the only age group that listed podcasts and webinars among their top five sources of information, cited by 27%.

The financial advice choices of adults in their preretirement years, ages 50 to 64, are notably different from those of younger adults, Gallup found. Forty-five percent said they work with a professional advisor, well ahead of the 33% who said they seek out friends and family, 31% banks and credit unions and 31% financial websites.

Another difference between older and younger respondents is their reliance on finance-based TV and radio programs, cited by 24% of preretirees, the highest percentage of any age group. Only 10% said they use social media, including 3% who follow financial content creators.

Half of adults 65 and older reported using financial advisors and planners, higher than any other source. Twenty-seven percent each ask friends and family and financial institutions for advice, and 23% look for information on financial websites.

Seniors use TV and radio financial programs just as often as the two youngest age groups, according to the poll, but fewer seniors rely on newer media formats.

Gallup said its findings raise important questions: Will younger generations come to rely on professional guidance the way their older counterparts do? Or will their greater comfort with digital tools empower them to remain largely self-directed in managing their finances?

The answer, the poll found, may hinge on people’s continued need for human connection, and on the ability of financial technology to deliver not just powerful tools, but also the confidence and competence consumers need to use them independently.

Where Wealthier Americans Seek Advice

Americans’ use of various sources of financial guidance differs less by household income than it does by age, according to the poll, with one exception. Fifty-four percent of upper-income earners work with financial advisors/planners, compared with 39% of middle-income earners and 20% of lower-income ones.

Wealthier Americans are also somewhat likelier than lower-income adults to tap more traditional financial advice or educational resources — financial websites, banks and credit unions, TV/radio financial programs, podcasts/webinars and employer-offered financial programs.

At the same time, they report similar reliance on friends and family, as well as government resources and books. Lower-income adults are slightly heavier users of social media.

Another notable difference by income is the proportion of each group that reports not using any of the 10 financial resources of financial information and advice — just 8% of upper-income Americans report, versus 17% of middle-income earners and 23% of lower-income adults.

Differences in Americans’ use of financial resources by gender are even less pronounced than by income, Gallup’s poll found. Women were slightly more likely than men to say they turn to friends and family or seek information from financial institutions. Men, on the other hand, were more likely to use financial websites, podcasts/webinars and books.