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Advisors Trump Online Advice, Friends and Family

Nearly 8 out of 10 investors say they are tapping into some form of financial advice in planning for retirement, but there’s a wide variety in how that is happening, and who is taking advantage of it, according to a new Gallup poll.

A plurality — 44% — say they turn to a dedicated financial advisor, compared with 29% who rely on a friend or family member. Overall, 79% of investors report using at least one of the four financial advice resources tested: 
• a dedicated financial advisor
• a financial advisory firm, where you call in to a call center and speak to an advisor
• a friend or family member
• an online financial planning of investing website  

The largest percentage of investors — 40% — rely on just one source. But almost a third (30%) draw on two, 7% on three, and 2% on all four.

It’s interesting to note that many more investors rely on a financial adviser to the exclusion of a financial website than the reverse: 37% versus 14%. Only 7% rely on both, either alone or in combination with other resources.

Men and women are about equally likely to report using three of the four advice resources. The exception is financial websites, which men are about twice as likely as women to say they use (25% versus 14%). The survey found little difference across types of investors in the use of financial advisory firms, with about a third of each demographic group saying they use one.

Retirees and investors with $100,000 or more in invested assets were significantly more likely than their counterparts to use a dedicated financial advisor. Nonretirees are more likely than retirees to use financial websites or to rely on friends and family.

Fewer than a third of investors (30%) say they are "very comfortable" using online or mobile technology for their investing or financial advice needs, with another 27% saying they are somewhat comfortable. However, 43% are not comfortable with those media for investment or financial advice.

Not surprisingly, some of the comfort level appears to be generational. About two-thirds of nonretirees indicated at least some level of comfort with online financial advice tools, compared with 35% of retirees. Additionally, women seem to be less comfortable with them than men are (51% of women compared with 37% of men).

As for prospects for change, 85% of retirees anticipate no change in how they expect to use online or mobile technology more in the next two to three years than they do currently, as was the case with two-thirds of nonretirees.  

The findings are based on a Wells Fargo/Gallup Investor and Retirement Optimism Index survey conducted in late June and early July, and is based on a nationally representative sample of U.S. investors with $10,000 or more in stocks, bonds, mutual funds or a self-directed IRA or 401(k).