Only one-third of Americans consistently take action after receiving financial advice, according to the latest TIAA-CREF study. Despite the lack of action among so many, nearly half of all surveyed admitted they worry about their long-term financial futures.
The survey, which was taken by an independent research firm, polled a random sample of more than 1,000 adults nationwide about their attitudes, preferences and behaviors relating to financial advice.
“The fact that people are not consistently acting on the advice they receive comes as no great surprise. People are all too often inundated with information telling them to save more, cut costs and plan for retirement, but how you go about that differs for every person,” said James Nichols, senior managing director, advice and planning services at TIAA-CREF. “At TIAA-CREF, we recognize that when it comes to personal finance, one size does not fit all.”
According to recent analysis of TIAA-CREF’s own client base, individuals are more than 60 percent more likely to implement a financial change when there is an explicit investment recommendation vs. general guidance. In addition, participants who received TIAA-CREF’s advice, on average, may have $200,000 more in savings at retirement over the course of a 30-year career.
“We’ve seen personalized objective advice help drive positive outcomes for our participants. Last year, two-thirds of those participants who took advantage of TIAA-CREF’s advice took action – choosing to save more, review their retirement plan portfolio allocation or rebalance their portfolio – and nearly half have increased their contributions to their retirement funds,” Nichols added.
The survey also found that the desire to seek advice and take action differed based on age, gender and other individualized factors.
Respondents ages 18 to 34 – “Gen Y” – showed more interest in getting financial advice than any other age group surveyed. And four in 10 said they frequently look for financial advice. Gen Y also was more likely to report making changes after receiving advice, and nearly 60 percent said they are likely to use online tools to do so.
Women respondents were more likely than men to face challenges finding financial advice. Nearly half of women surveyed believed personalized, objective advice will cost more than they can afford, and more than one-third said they don’t have the time to look for it. However, women were more likely than men to take action on advice received, with nearly 90 percent reporting they do at least some of the time.
According to the results, Baby Boomers (ages 55-64) felt that financial advice was very hard to find and only one in three said that they consistently act on the advice they receive. This is especially concerning given the size of the Baby Boomer population.
“Clearly there are gaps in the marketplace between what people say they need and what’s readily available to them, and we are continuing to evolve our advice offering to address those needs,” Nichols said. “We recognize that it’s important to work with individuals in a way that is comfortable for them – from both a convenience and trust perspective.”
The survey findings further support the need for individualized advice, with one in five Americans saying finding relevant financial advice is difficult. Of those, 51 percent said they don’t know where to start looking, and 74 percent said they don’t know which sources they can trust for financial advice.