Markets, Financial Planning, Retirement

Reasons To Consult With A Financial Advisor

10/26/18 8:00 AM

iStock-626627280.jpgStock market volatility has picked up recently, but many institutional investors remain optimistic that the multi-year bull run for equities can survive this latest drawdown. In fact, a new survey conducted by Barron’s found that 56 percent of professional money managers are bullish on U.S. stocks over the next 8-9 months, with an average price target for the benchmark S&P 500 index of 3,078. That would be an 11 percent gain from last Friday’s close and 5 percent above the all-time high hit in September.

Despite the bright outlook, no outcome is guaranteed and there are still lots of unknowns (risks) for the markets to digest in the near-term that could keep volatility elevated. Since retail investors will likely find navigating such an environment more difficult than professional money managers, many individuals may benefit from consulting with a financial advisor. Indeed, a poll conducted by Gallup found that 39 percent of American investors that regularly work with an advisor said that they feel prepared for a market correction, while less than a quarter of respondents that do not consult with a financial professional were able to report the same level of confidence.

Surveyed investors that work with an advisor were also more likely than respondents lacking outside guidance to say that they have a diversified portfolio (86 percent vs. 63 percent), believe their investment plan is on the right track (61 percent vs. 41 percent), rebalance their portfolio at least once a year (54 percent vs. 33 percent), and have a written financial plan in place (68 percent vs. 28 percent). Further, an advisor can help with more than just investing and risk management. An earlier report from John Hancock, for instance, found that seven in ten surveyed U.S. adults who work with an advisor feel “on track or ahead in saving for retirement.”

Only a third of the respondents that do not regularly seek professional guidance were able to report the same level of confidence in their old-age financial preparedness. Individuals who consult with an advisor were also found to have a much higher likelihood of knowing how much they will need to save for retirement and regularly setting money aside toward that goal. Moreover, survey respondents that work with a financial advisor had a greater probability of maxing out their 401(k) plan contributions and establishing an emergency fund to help them avoid dipping into their retirement assets early.

 


 

Sources: Barron’s, Gallup, John Hancock

Post author: Charles Couch

Disclosures