WINDSOR, Conn., July 11, 2012 — LIMRA research shows that consumers who rely on financial advisors are more likely to be saving in a retirement plan and to be saving at a higher rate than those without an advisor. In addition, consumers LIMRA surveyed who had financial advisors were more confident they will have enough to last throughout retirement than their counterparts.
"We've all seen the scary statistics that not enough people are saving for retirement — a recent LIMRA survey revealed that almost half of Americans were not contributing to an employer sponsored retirement plan or an IRA," said Alison Salka, corporate vice president and director, LIMRA Retirement Research. "Given the decline of defined benefit pension coverage, people need to be saving more to fund their retirements. We do see one hopeful sign. Our research shows that consumers who work with an advisor are more likely to contribute to a retirement plan."
LIMRA's study found that 78 percent of non-retired consumers who worked with an advisor contributed to a retirement plan or an IRA, while only 43 percent of consumers who weren't working with an advisor were contributing to their retirement savings. Even controlling for income, consumers who work with a financial professional are more likely to be contributing to a defined contribution plan or IRA.
LIMRA researchers attribute the difference to education — financial advisors provide information, recommendations and guidance. Of the one quarter of non-retired Americans who report working with a paid financial professional, half indicate that the advisor provided guidance on how much to save for retirement and nearly a third indicate the advisor provided guidance on a target amount to save. Clearly, this guidance can make a difference and gives people a path to retirement saving.
Using an advisor is related not only to whether or not people save, but also to how much they save. According to LIMRA's studies, those who work with an advisor are more likely to be saving at higher rates, defined as contributing more than seven percent of their salary to their retirement plan. Sixty-one percent of consumers who work with an advisor saved at a high rate compared with 38 percent of consumers who did not work with an advisor. Using Advisors Drive Greater Saving Habits
Most important, LIMRA's research showed that people who work with an advisor are more confident that they're saving enough. Seventy-one percent of Americans who work with financial advisors were confident they are saving enough for retirement, while only 43 percent of those who don't work with advisors were confident that they are currently saving enough to last throughout their retirement years.
"It is clear that advisors make a difference," commented Salka."“It is vital that we as an industry better communicate the value of using an advisor to ensure a secure retirement — especially to younger consumers who are less likely to have a pension to rely on in retirement and, according to our survey, are also less likely to be saving for retirement."
Catherine Theroux, (860) 285-7787, firstname.lastname@example.org
LIMRA, a worldwide research, consulting and professional development organization, is the trusted source of industry knowledge, helping more than 850 insurance and financial services companies in 73 countries increase their marketing and distribution effectiveness. Visit LIMRA at www.limra.com