U.S. Investors Seek Professional Advice Relatively Infrequently

According to a September 12th article from Gallup, most American investors are not prone to seek financial advice. In fact, most U.S. investors only seek advice from financial professionals for long-term concerns such as a personal financial plan.

This data for the Gallup article came from the Wells Fargo/Gallup Investor and Retirement Optimism Index survey conducted in June and July of this year. The survey was undertaken with a representative sample of U.S. investors with $10,000 or more in stocks, bonds, mutual funds or self-directed IRAs or 401(k) accounts, and it surveyed whether respondents had sought advice on major financial decisions such as buying a car or creating a college savings plan. More than 82% of U.S. investors had bought a car, but less than 20% of respondents had used professional advice in doing so. Of note, investors were most likely to have sought advice when developing a personal financial plan, with 63% responding they did so, and 74% of these said it was professional, not informal, advice.

Charlie Munger: Invert And Use “Disconfirming Evidence”

Charlie MungerCharlie Munger is considered to be one of the best investors and thinkers alive today. His thoughts and statements on investment research, investment psychology, and general rational behavior are often incredibly insightful. Anyone can learn something from this billionaire investor and philosopher. Q2 2020 hedge fund letters, conferences and more If you’re looking for value Read More

More details on the Wells Fargo/Gallup survey

Nearly 80% of the respondents have some experience with most of the activities in the survey (82% buying a car, 80% planning a major vacation, 77% purchasing a house, and 76% creating a personal financial plan). The only activity that most investors had not done was creating a college savings plan (38%).

Among those with experience with each financial activity, the percentage who have sought some sort of advice varies from 63% for creating a personal financial plan to 28% for buying a car. Around three in 10 respondents have sought advice for planning a major vacation, and 39% have done so for buying a house. Although less than 40% say say they have created a college savings plan, 42% of those who have say they looked for advice when undertaking the decision.

U.S. Investors Professional Advice

Of note, around three-quarters of those who have sought advice for a personal financial plan used professional advice rather than informal advice. Furthermore, more than half of advice-seekers for buying a house and creating a college savings plan chose to consult with a financial professional. The percentage, however, drops significantly for those planning a major vacation — only 23% of those who have sought advice sought it from a professional, and only 19% for buying a car.

Men less likely to ask for help

U.S. Investors Professional Advice

Although both genders claim similar levels of experience with most of the activities, women are a good bit more likely to seek advice in three of them. Interestingly, only 22% of men compared to 35% of women have sought advice when purchasing a car. Women are also more likely than men to seek advice when buying a house and creating a college savings plan.