The vast majority of consumers who find a financial task difficult don’t seek help. This opens up a gap for financial advice, according to a report from Hearts & Wallets.
The report,“Pain Points & Actions: Insights to Address Large Advice Gaps by Reaching Consumers with Unmet Needs,” reveals the most pressing pain points different groups of consumers face.
Consumers say a range of financial tasks are more relevant to them now than they were six years ago. Two of the most relevant tasks are “knowing how to find resources to plan financially in retirement” and “developing strategy to withdraw from multiple accounts.”
Other areas in which consumers say they need help are:
- Determining the appropriate levels of insurance for their needs.
- Determining the appropriate levels and types of health insurance.
- Estimating or budgeting retirement spending.
“I think these results show that insurance advisors are very needed by consumers,” said Laura Varas, Hearts & Wallets founder and CEO.
Younger consumers – those 28 to 39 years old – show the biggest “advice gap,” Varas said. Some of the areas in which this age group needs help include:
- Identifying what year they might be able to stop working full-time.
- Knowing how to find resources to improve their ability to plan financially for retirement.
“They also are looking for more advice about retirement than about any financial product,” Varas said.
The study showed that despite all the advertising by insurance and financial services companies, “people are more confused than ever,” Varas said. “So some part of this message isn’t resonating with consumers.”
The advice gap shown in the survey “puts insurance advisors in a great spot to help,” she said.
“There are so many people who don’t believe there’s a solution for them,” she said. “They need the kind of help that goes beyond looking at calculators online.”
“Financial tasks like retirement planning are hard,” she continued. “Consumers get confused or default to inertia because they don’t understand which solution out of the wide range of offerings in the marketplace fits their specific needs. Firms need to personalize products and advice so that consumers easily see what options are available to help them and don’t default to inertia.”
Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected]. Follow her on Twitter @INNsusan.