Dimensional, a US based investment house who manage more than $500 billion of assets recently launched the results of their investment survey. This survey which got responses from over 19,000 advisor clients globally is probably the largest of its kind in the world.

The survey is unique in that it asks advisors what they think their clients are thinking and then asks the clients directly “what are you thinking”

For example, when advisors were asked

“What is your clients greatest fear about your finances?”

53% of advisors said it was that their client feared not having enough money in retirement. However only 37% of clients felt the same. (37% did still represent the highest answer.)

What was more interesting in my opinion was the fact that only 20% of advisors felt “a significant loss” i.e. a big stock market crash would be their clients biggest fear. Yet it was the top concern for 31% of clients.

At the opposite end of the spectrum 13% of clients worried they would die before they got to spend all their money, first world problems hey!

What was interesting was comparing the response of retired clients versus working clients. For example, although overall 13% of clients worried about dying before they spend all their money or “outliving their money”, when you look at the split between working and retired almost 16% of people already retired felt this was their biggest concern.

Significant loss or a big stock market crash was retired peoples biggest concern. I suppose if you already have you have a bigger fear of losing it.

The survey also looked at what people want to know about their retirement. The most important thing people want to know about retirement is “how much they will have to spend each year”. Followed by “the likelihood they would actually achieve their retirement goals”.

This shows that people are curious about whether or not they are on track and what type of life they will have in retirement. This is a really difficult question to answer if you don’t have the skill and expertise yourself to work it out. A good financial planner does this for breakfast. It is a key responsibility of an advisor to work out are you currently on track, what standard of living you can expect in retirement and how much is enough.

This stuff is a maze for most people. I accept the survey itself could be a little skewed because it was taken from clients of advisors. These are people who have already engaged the services of a financial planner. But not only that they also place enough value on that relationship that they went to the bother of completing the survey for their advisor.

However even taking that into consideration practically all the clients surveyed (98%) said they would refer a client to their advisor. So it shows when people do bother to engage with a financial planner they find the relationship beneficial enough they think others should do it too.

According to a different study carried out by great west life co in Canada people who have a financial planner have 2.5 times the net worth of people who don’t when they retire. The value add of financial advisor is in the region of 4% per annum before their fees are considered, that’s according to a study carried in 2011 by fund giant Vanguard.

This study shows people have real concerns about their finances, and these are the people who are advised.

I worry for those with no advisor and wonder are they more concerned or have they their heads in the sand?


By continuing to use the site, you agree to the use of cookies. more information

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.