Review: Younger Americans embrace value of unbiased financial advice

The fiduciary rule has been in the news again lately, as some members of Congress have been trying to “delay” it so they can “study” its impact. In other words, kill it. But there’s some interesting data that suggests that, at least in the long term, this is moot.

Cerulli Associates has found that young investors are much more willing to directly pay for financial advice than older investors. And there’s a pretty clear divide – only 54% of investors from 40-49 would pay for financial advice, but 79% of investors from 30-39 would pay for financial advice.

It appears that acceptance across all age groups is growing as well. In 2008, only about 40% of all investors were willing to pay for financial advice. Now about half of investors are open to paying for advice.

This is important. People are starting to catch on that “free” advice is not free.

If you’re not the one paying your stock broker, financial consultant, or whatever they are calling themselves this week, then someone else is, and that means your advisor is not actually working for you. They are working for whoever is actually paying the bills.

In the vast majority of cases, they are doing everything they can to help you. Most people who get into the people side of financial services genuinely want to help clients, but there are always conflicts of interest, to say nothing of the folks who are always going to push the envelope.

But, if this trend continues, the official rules may not matter so much. Financial services firms are here to make money, and if their clients are demanding that they follow the fiduciary standard, well, that’s what they’ll do – eventually.

There’s going to be a lot of kicking and screaming (which would be avoided if the fiduciary rule were actually put in place), but the market will get there. Even if it does so grudgingly.

If you’re wondering why you would want to pay someone for financial advice, you should read our ebook The Value of Financial Advice

 

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