Markets, Financial Planning, Retirement

Reasons To Consult With A Financial Professional

10/24/17 8:00 AM

iStock-615412340-1.jpgEvery major stock market index is now at or near an all-time high, and more than a third of investors surveyed last week by the AAII said that they still expect equities to rise over the next six months. While stocks could very well continue to lift to even greater heights, it is unlikely that there will not be any bumps along the way. In fact, despite what one might infer from this year’s lack of volatility, pullbacks in the stock market are actually quite common.

Such drawdowns can at times be very scary but retail investors that regularly consult with a professional financial advisor are less likely to panic during these situations. For example, a new poll conducted by Gallup found that 39 percent of U.S. investors who work with an advisor said that they feel prepared for a market correction, while not even a quarter of respondents that do not consult with a financial professional reported the same level of confidence. Surveyed investors that work with an advisor were also more likely to say that they:

  • Strongly agree their investment plan is on the right track
  • Give themselves an A or B grade on knowledge of stock investing
  • Have a written financial plan to guide their financial decision-making
  • Have a diversified investment portfolio
  • Rebalance their investment portfolio at least once a year

Apart from helping Americans with investing and risk management, professional financial advisers can also assist in ensuring a secure retirement. An earlier study from John Hancock, for instance, found that seven in ten surveyed U.S. adults who work with a financial advisor said that they are “on track or ahead” in saving for retirement, while only a third of respondents who do not work with an advisor reported the same level of preparedness.

Individuals who consult with a financial advisor were also found to be more likely to know how much they will need to save for retirement and regularly set money aside toward that goal. Moreover, people who work with a financial advisor had a higher probability of maxing out their 401(k) plan contributions and establishing an emergency savings fund to help them avoid dipping into their retirement assets early.



Sources: Twitter, AAII, Gallup, John Hancock

Post author: Charles Couch