Americans say that financial advisors are the most trusted source of financial advice and those who work with one are much more confident, yet a surprisingly few do so, new survey data shows.
According to findings from Northwestern Mutual’s Planning & Progress Study, people who work with an advisor have significantly higher levels of confidence across a range of areas, including being prepared for unplanned expenses (31 percentage points higher), being able to retire when the time comes (29 percentage points higher) and achieving long-term financial security (28 percentage points higher).
That said, the findings also show that less than 4 in 10 (37%) respondents work with one. What’s more, two-thirds (66%) believe their financial planning needs improvement—a 4 percentage-point uptick from the previous year.
This was especially true among younger adults, among whom nearly 8 in 10 (79%) respondents for both Gen Z and Millennials agreed with this sentiment, which was up 5 percentage points from last year for these cohorts.
| How financial advice impacts confidence | Individuals who work with an advisor | Individuals who do not work with an advisor |
|---|---|---|
| I have had/will have a successful career | 85% | 62% |
| I will have enough money for retirement (retirees) | 80% | 58% |
| I can enjoy today without sacrificing happiness in the future | 76% | 59% |
| My financial planning incorporates the possibility of unplanned financial or health emergencies | 80% | 49% |
| I have achieved/will achieve long-term financial security | 75% | 47% |
| I will have enough money to retire when the time comes (non-retirees) | 74% | 45% |
| Social Security will be there when I need it | 66% | 49% |
One factor driving this could be the current economic landscape, Northwestern notes. Nearly one in five respondents (18%) say that recent economic uncertainty has led them to either begin working with a financial advisor or plan to work with one at a later date.
“When Americans ground their financial future in a custom-built plan and an expert advisor instead of in their own gut feelings, the confidence boost can be tremendous, and the improved financial outcomes can be just as significant,” says Tim Gerend, chief distribution officer at Northwestern Mutual. “Financial advisors can help people in so many ways they might not realize—managing debt, building and protecting wealth, estate planning and more.”
Most Trusted Source
Notably, financial advisors outpace spouses, family members, business news, friends and social media as Americans most trusted source of financial advice.
Northwestern found that, while Gen Z and Millennials may spend a significant amount of time on social networks, the vast majority are not turning to those channels for trustworthy financial guidance. Both groups ranked financial advisors among the most trusted sources of financial advice—#1 for Millennials and #2 for Gen Z, second only to family members.
| Most trusted source for financial advice | All | Gen Z | Millennials | Gen X | Boomers+ |
|---|---|---|---|---|---|
| Financial advisor | 31% | 22% | 25% | 35% | 35% |
| Spouse/partner | 17% | 12% | 20% | 15% | 16% |
| Family member | 14% | 28% | 19% | 12% | 8% |
| Business news | 8% | 11% | 6% | 8% | 9% |
| Friend | 4% | 4% | 7% | 4% | 2% |
| Financial influencer / social media | 3% | 6% | 4% | 2% | 0% |
“FinTok and meme stocks inspired many young people to get excited about building wealth, but it’s clear that they are turning to advisors for advice they can trust,” says Gerend, who adds that the average age of their new clients is 32.
Older vs. Younger Generations
The data finds two leading reasons people turn to advisors for financial guidance: for their professional expertise and to help them maintain a long-term view that keeps them on track to achieve goals (both at 48%).
Older Americans prefer an advisor with expertise, while Gen Z and Millennials were more likely to turn to an advisor for help aligning their finances with their values, saving time and keeping up to date on industry and regulatory changes.
| Reasons individuals turn to an advisor | All | Gen Z | Millennials | Gen X | Boomers+ |
|---|---|---|---|---|---|
| Offers professional expertise I don't have | 48% | 28% | 29% | 50% | 66% |
| Helps me keep a long-term view so I can achieve goals such as a financially secure retirement | 48% | 30% | 43% | 54% | 51% |
| Helps me reduce my financial anxiety and provide peace of mind | 44% | 31% | 37% | 44% | 53% |
| Helps me plan and keeps me organized, disciplined and on track | 43% | 35% | 47% | 47% | 37% |
| Helps me align my finances with my values | 31% | 33% | 40% | 24% | 29% |
| Keeps me up to date on things like changes in the tax code | 31% | 39% | 33% | 29% | 29% |
| Saves me time | 31% | 44% | 42% | 30% | 19% |
Additionally, when selecting an advisor to work with, respondents said they prioritize someone who understands their life stage priorities (54%) and who has a long track record of experience (51%). When looking across generations, however, priorities begin to differ. Gen Z and Millennials, for example, place a higher premium on working with an advisor who is tech-forward and demographically similar to them.
| Reasons for choosing an advisor | All | Gen Z | Millennials | Gen X | Boomers+ |
|---|---|---|---|---|---|
| Understands the priorities for someone in my stage of life | 54% | 42% | 47% | 52% | 63% |
| A long track record of experience | 51% | 32% | 42% | 58% | 58% |
| Tech-forward and accessible to communicate with beyond in-person meetings | 21% | 25% | 29% | 16% | 18% |
| Demographically similar to me (e.g., age, gender, race/ethnicity, sexual orientation) | 21% | 28% | 34% | 18% | 12% |
“What we know is that people form long-term relationships with their advisors lasting 20, 30 or 40 years, and it’s clear that younger generations are expecting empathy just as much as they’re expecting financial expertise,” explains Gerend. “For someone to feel comfortable sharing their dreams and worries with an advisor, there needs to be a human connection rooted in trust and understanding, and that’s something our industry should continue prioritizing.”
The study was conducted Feb. 13–March 2, 2023, by The Harris Poll on behalf of Northwestern Mutual among 2,740 U.S. adults.
