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More Americans Seeking Help with Financial Tasks

Industry Trends and Research

A new report finds that more U.S. households are seeking help for multiple financial tasks, with growth being driven by households with $100,000 to $500,000 in assets. 

Nationally, 3 in 10 households sought help on three or more tasks in 2021, a year-over-year increase of 4 percentage points and up 8 percentage points since 2014, according to Hearts & Wallets’ Pain Points & Actions: Using the Biggest Advice Gaps to Jump Start Consumer Conversations report.

Comparison with older generations, Millennials and Gen Xers are more likely to seek help for multiple financial tasks, seeking help for three or more tasks and often as many as seven or more. In addition, Millennial and Gen X consumers who say COVID-19 changed their attitudes to saving and investing are especially likely to seek help on multiple tasks.

The report analyzes consumer difficulty with 28 financial tasks, the behavior of seeking help and advice gaps, providing views by generation, life stage and assets, with advice gap data broken out by a range of asset levels under $5 million as well as over $5 million. 

Advice Gaps

According to the report, households with up to $5 million in assets report that their top five biggest financial advice gaps are:

  • handling market volatility;
  • choosing appropriate investments;
  • estimating required minimum distributions (RMDs); 
  • making buy/sell decisions on investments; and 
  • estate planning. 

Hearts & Wallets defines an “advice gap” as an unmet need for advice on a specific task when a household finds a task difficult and has not sought help. Examples of possible reasons for an advice gap include that households may not think they can afford to seek advice on this topic, may consider the price of advice too high, or may be overwhelmed by inertia. Help includes asking a financial advisor, going online or seeking out friends and family. 

In terms of assets, the biggest advice gaps are estate planning, managing finances of aging loved ones and deciding whether to do Roth conversions, when households with $5 million and more are included.

For pre-retirees, the top advice gap is developing a strategy to withdraw income from multiple accounts. For both Millennials and Gen Xers, retirement planning was viewed as a top advice gap, as roughly a quarter of respondents for both groups view the task as very difficult but have not sought help with it. Retirees and fully employed seniors were found to have the lowest percentage of advice gaps of all life stages.

Consequently, the report suggests, firms should focus acquisition efforts on younger and middle-aged consumers, since they will be easier to engage than older consumers who do not find as many tasks difficult and already have their support networks in place. 

Addressing advice gaps can create opportunities to introduce and cross sell new products, the report emphasizes. “Advice gaps provide opportunities for financial services firms to start conversations with consumers,” says Laura Varas, CEO and founder of Hearts & Wallets. “Estate planning is an unmet advice need across all asset levels and most life stages, not just older, wealthier households. Firms should consider ways to support younger, lower-asset consumers who struggle with the estate planning advice gap.”

Value in Advice

Not surprisingly, experience with advice equates to a greater likelihood of seeing value in paying for it. According to the report, households which have experienced advice—as indicated by having sought help on two or more tasks—are more than twice as likely to see value in paying for professional advice than households who have not experienced advice.

However, while many Americans may say a financial task is difficult, that does not necessarily mean they are seeking help. Hearts & Wallets found that 3 in 10 U.S. households say seven or more financial tasks are very difficult (ranked 8 to 10 on a 10-point scale) but did not seek help for a single task.

“Reasons for not seeking help vary,” notes Amber Katris, Hearts & Wallets Subject Matter Expert. “Consumers may not know where to turn for help, have difficulty relating to support, be worried about affordability, overwhelmed by inertia, or their providers may not be engaging with them.” As such, firms should build customer experiences that can handle multiple advice tasks, using individual tasks as hooks to start conversations, she suggests. 

The research includes the latest survey wave of 5,794 U.S. households in September 2021 and trended data of nearly 65,000 households dating back to 2010 in the Hearts & Wallets Investor Quantitative Database.