Consumers who rely on financial advisors are more likely to be saving in a retirement plan and to be saving at a higher rate than those without an advisor, according to a new study.
LIMRA, Windsor, Conn., published this finding in a summary of results from a new of survey. The study reveals that consumers who have financial advisors are more confident they will have enough to last throughout retirement than their counterparts.
LIMRA's study found that 61% of consumers who work with an advisor contribute to a retirement plan or an IRA, while only 38% of consumers who don’t work with an advisor contribute to their retirement savings. Controlling for income, consumers who work with a financial professional are also more likely to contribute to a defined contribution plan or IRA.
LIMRA researchers attribute the difference to education: Financial advisors provide information, recommendations and guidance.
Of the one quarter of non-retired Americans who report working with a paid financial professional, half indicate the advisor provides guidance on how much to save for retirement. And nearly a third of survey respondents indicate the advisor provides guidance on a target amount.
The LIMRA survey also reveals that those who work with an advisor are more likely to be saving at higher rates, defined as contributing more than 7% of their salary to their retirement plan. Sixty-one percent of consumers who work with an advisor save at a high rate compared with 36% of consumers who do not work with an advisor.
LIMRA's research shows that people who work with an advisor are also more confident that they're saving enough. Seventy-one percent of Americans who work with financial advisors are confident they are saving adequately for retirement, while only 43% of those who don't work with advisors are confident.