MDRT Study Shows Key Differences Between Advised Financial Clients and "Do-It-Yourselfers"

In late March, the Million Dollar Round Table (MDRT) announced the results of a new study, commissioned by the MDRT and conducted online by Harris Poll.  In it, they found that 79% of Americans have never hired a financial planner, 38% of whom say it’s because they are capable of managing their finances alone. Many Americans who have hired a financial professional, however, report feeling confident at the sight of relatively complex financial terminology such as long-term care insurance (41%), Roth IRA (69%), and annuities (49%).

While roughly one half of Americans who have never hired a financial professional feel confident with traditional terms such as “life insurance” (51%) and “401(k)” (52%), the proportion of those who feel confident seems to drops when it comes to more complex areas such as “long-term care insurance” (31%), “Roth IRA” (42%), and “annuities”(28%).

“These results further emphasize the importance of planning for a healthy financial future,” said Mark J. Hanna, CLU, ChFC, MDRT president. “Consider working with an advisor like hiring a professional builder to renovate your home. While you may be able to paint the walls on your own, your overall knowledge wouldn’t enable you to replace your pipes or build new cabinets in your kitchen.”

Of the Americans who have never hired a professional, less than one half (46%) have a retirement plan or emergency fund, 19% have a long-term financial plan for the future, and 46% own life insurance. This is in contrast to the 21% who have hired a financial planner, in which 77% have a retirement plan or emergency fund, one half have a long-term financial plan for the future, and 63% own life insurance. Among those who have never hired a financial professional, when asked why:

·       44% say they don’t have enough assets or money to need one.

·       38% say they are capable of managing their own finances.

·       36% say it would cost too much money.

“Working with a financial professional gives you a resource for deeper understanding of financial terminology and planning capabilities, ensuring you protect yourself and your family with a well-rounded plan,” said Hanna.

Thirty-six percent of employed millennials (ages 18-34) whose company offers a 401(k) or pension plan are not participating in it, despite a 2016 MDRT survey findings that the average millennial expects to retire at a younger age than other generations.

This survey was conducted online within the United States by Harris Poll on behalf of MDRT from February 6 to 8, 2017, among 2,202 U.S. adults ages 18 and older, among whom 490 have hired a financial planner and 1,712 have not. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables, please contact Emily Bunce at ebunce@gscommunications.com.