Finding the best source of financial advice isn’t easy as a recent survey demonstrates.
The results are in! A recent survey of 2,000 U.S. residents over 18, Nationwide® revealed the top 10 sources of financial advice. While we know that your clients believe that you are the best source of financial advice, there are many out there who need your assistance! Here is the countdown from the tenth to the most popular source of financial advice.
10. ChatGPT 3%
Since the jury is still out on artificial intelligence (AI), it’s too soon to tell if this is a valid source for investment advice. To test it out, twice I used an AI app and inquired about myself. The first time, it reported that I was Thornburg’s General Counsel. The second time it responded that I am the Chief Economist and a Senior Portfolio Manager at the company, and that I joined the company in 2000. The truth is, I am not Thornburg’s General Counsel, Chief Economist nor am I a Senior Portfolio Manager. Finally, I didn’t join the company in 2000. Given the potential for bad information, people should be wary of AI and avoid using it as a source for any type of advice.
9. Academic resources 9%
When it comes to financial information, consumers have an infinite number of academic resources available. So many resources that it can be overwhelming to determine where to begin. Academic resources are most valuable if an individual narrows their search and uses the resources as a way to increase their knowledge on specific topics.
8. Current or previous colleagues 9%
This source of financial information is most valuable if an individual has specific factual and/or procedural questions about benefits offered by a current or past employer. Beyond that, it’s best to avoid seeking strategic investment advice from this source and consider going to the employer’s HR or benefits experts.
7. Mentor or sponsor 10%
It’s common for mentors and sponsors to provide guidance and advice on a profession or career path. Unless there’s some proof to believe a person in this role is an investment expert, it’s best to remain focused on career-related activities.
6. Social media 11%
When it comes to social media, it’s difficult to determine what’s believable and what’s not.
5. Tie between:
Media sources 16%
When it comes to the media, it’s difficult to determine what’s true and what’s not. To avoid bias, seek investment-related facts from reliable sources, not opinions. Remember that causation is different than correlation and scare tactics are often used as a “hook”. For example, consider the recent Debt Ceiling coverage. How many times did you hear that a failure to come to an agreement would result in a catastrophe? It never happened, because as was the case with all the recent debt ceiling discussions, Congress and the White House agreed to raise the debt ceiling.
Accountants 16%
There was a time when accountants focused on taxes, but that’s not the case anymore. Because of their analytical expertise, familiarity with the complexity and tax implications of financial decisions, it makes sense that they might be a good source of financial advice, but that’s the case only if they devote enough time on becoming an expert.
4. Prayer 20%
While quiet introspection is important for all of us, it may not be the best source of financial advice.
3. Online resources 26%
This is so broad, it’s difficult to know what the survey respondents meant. Online resources are great sources for definitions, historical perspective, and factual financial information.
2. Financial advisor or planner 30%
It would have been great if advisors and planners would have come in as the most trusted source of financial advice. I am frequently dismayed by the fact that investors who aren’t trained in all things financial believe that they are qualified to make great financial decisions. I liken it to an individual conducting their own medical diagnoses or performing surgery on themselves – never a good idea.
1. Family or friends 48%
Investors often hear relatives or friends touting a recent investment success, but they never hear them brag about their wonderful excess disability policy.
As you know, there’s much more to providing personal financial advice than just recommending investments. It also entails providing insurance, taxes, retirement, health care expense management and estate planning advice. Such a breadth and depth of knowledge is required to become an expert in all aspects of this business, many of you have chosen to work on teams that allow you to specialize in one or two areas.
Prospects and clients face life events all the time that require them to make significant financial decisions. When this happens, it’s common for well-meaning, but untrained, loved ones to rush in to offer financial advice? During these times of vulnerability and uncertainty, people make decisions that can make or break their financial futures.
To ensure your clients seek advice from you instead of the sources like the ones mentioned in this survey, fine-tune your client experience to make sure that you and your teammates continually demonstrate your expertise and reinforce your value.
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