By the Numbers
FEBRUARY 17, 2017
56% — Percentage of investors who use a broker or a professional advisor
It’s a debate that touches many areas of our lives, whether you’re painting your home or investing: Should we do it ourselves or hire someone to help us?
According to a survey conducted by the FINRA Investor Education Foundation in 2015, more than half (56%) of 2,000 respondents who hold investments outside of their retirement accounts reported that they use a broker or a professional advisor for at least some of their investment decisions. They did so primarily to improve investment performance (81%) and help avoid losses (78%). They also wanted to know more about investment opportunities (63%) and have access to investments that wouldn’t normally be available to them (53%).
Perhaps not surprisingly, investors age 55 or older were more likely to seek professional investment advice. Regardless of age, however, the study found that the percentage of investors seeking advice increased with the dollar amount of their portfolio.
American Funds has uncovered similar findings. Seven out of 10 mutual fund owners who comprised American Funds “Voice of the Investor” survey indicated they use an advisor.
Another study conducted by American Funds found investors look to their advisors for help with a variety of objectives such as estate planning, investing for children’s college education and saving for long-term care expenses. By far the largest amount — some 84% — report that they seek their advisor’s help in investing for retirement.
“It’s interesting to note that investors who use a professional advisor do so in order to improve their investment performance and avoid losses,” says Sarah Lidschin, senior market research specialist at American Funds. “This makes sense because research shows that the majority of investors do not consider themselves knowledgeable about investing.”
“Investors expect to have more success with their investments when they use a professional,” she adds. “They’re trying to set themselves up for success, whatever their goals might be.”
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.