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WINDSOR, Conn., June 11, 2015—Nine in ten consumers who work with a paid financial advisor* believe their advisor always puts their interests first, according to a new consumer study by the LIMRA Secure Retirement Institute.

The report, Spotlight on Advisors: Consumer Perception, Assessment and Experience, describes that nearly one in three Americans work with a paid financial professional. Fifty percent of consumers report working with their financial advisor for five or more years and nearly one third have had the relationship for 10+ years. 

“The high prevalence of longer-term relationships suggests that clients are satisfied with the services they are receiving,” said Matthew Drinkwater, Ph.D., assistant vice president
LIMRA Secure Retirement Institute.  “In turn, the financial professionals who have long-standing clients are more likely to have a deeper understanding of their clients’ needs and preferences.”

As part of the survey, the Institute asked consumers to assess their financial advisor on five criteria related to regulatory standards of care (e.g., fiduciary vs. suitability):

  1. Always puts my interests first
  2. Recommends products that are suitable for me
  3. Gathered sufficient detailed information about my finances before offering advice or recommending products
  4. Understands my entire financial situation
  5. Provides excellent value for the costs associated with his/her services

For all five criteria, 9 in 10 consumers agreed with the statements (chart). The Institute found these results didn’t vary based on compensation method (fee-based, commission, etc.).

Overall study results showed only 43 percent of defined contribution plan participants discussed the advantages and disadvantages of potential rollover actions with someone. However, the Institute discovered that participants who regularly work with financial advisors are more likely to have discussed the advantages and disadvantages of potential rollover actions than those who do not work with a financial advisor (60 percent vs. 30 percent).  In addition, when working with a financial advisor to make the decision to roll the money into an IRA, 3 in 4 participants report that they continue to work with this advisor. This implies that the rollover transaction is usually not a one-time interaction but is instead undertaken in the context of a long-term relationship.

“As more Americans become solely responsible for funding their retirement, the financial decisions they make could be critical to their retirement security,” noted Drinkwater. “Clearly, consumers have confidence and trust in their financial advisors to help them make the right decisions based on their individual needs.”

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*The term “advisor” is defined as a paid financial professional (e.g. insurance agent, lawyer, accountant, broker, financial planner or advisor) used to make at least some of the household’s investment decisions.

LIMRA Media Contacts   

Catherine Theroux, 860-285-7787, ctheroux@limra.com
Mark Morris, 860-285-7875, mmorris@limra.com

About LIMRA   

LIMRA, a worldwide research, learning and development organization, is the trusted source of industry knowledge, helping more than 850 insurance and financial services companies in 64 countries. Visit LIMRA at www.limra.com.

About LIMRA Secure Retirement Institute     

The LIMRA LOMA Secure Retirement Institute provides comprehensive, unbiased research and education about all aspects within the retirement industry to improve retirement readiness and promote retirement security.  For information on the LIMRA LOMA Secure Retirement Institute, visit: www.secureretirementinstitute.com.

Media Contacts

Catherine Theroux

Director, Public Relations

Work Phone: (860) 285-7787

Mobile Phone: (703) 447-3257

ctheroux@limra.com

Brooke Lacey

Public Relations Specialist

Work Phone: (860) 298-3920

blacey@limra.com