CHARLOTTE, N.C.--(BUSINESS WIRE)--While cost and trust issues persist as major obstacles for investors in engaging with financial advisors, there’s an additional fear factor emerging: fear of financial judgment.
According to a September survey of 2,000+ U.S. adults commissioned by TradeKing Advisors and conducted online by Harris Poll1, more than half (57%) of would-be investors2 say the prospect of speaking to an in-person financial advisor has actually stopped them from investing. Why? Among their reasons is a reluctance to share their financial position and limited financial knowledge.
“The financial services industry has made strides in recent years using technology to address the issues of cost and transparency, and that’s been great for investors,” said Richard J. Hagen, CEO of TradeKing Advisors. “But there’s clearly another element at play in today’s market that needs addressing. People are often wary of biases, hidden agendas and being judged for their lack of financial savvy, and this wariness can lead to a high degree of investor paralysis. Now we’re beginning to see technology play a useful role here, too.”
Where the Fear Level is Highest
The reluctance to engage with an in-person financial advisor appears particularly acute among Millennials and Gen Xers. A full 74% of Millennials age 18-34 who have ever considered investing say the prospect of speaking to a financial advisor has stopped them from investing, while 66% of likely Gen X investors age 35-44 say the same. In general, males are slightly more likely than females to say the prospect of speaking to a financial advisor has stopped them from investing (60% vs. 53%)
Curiously, parents with children under 18 are significantly more likely to agree that speaking with a live financial advisor has hindered them from investing than those without children (73% vs 51%).
Among would-be investors, the top three reasons cited for the reluctance across all age categories are:
- 30% say concerns about cost
- 27% say trust issues
- 22% say reluctance to reveal financial situation/knowledge
Whose Judgment We Fear the Most
Among U.S. adults, particularly for Millennials and parents with children under the age of 18, Mom and Dad’s judgment of their financial situation is feared most (14%)– more so than that of a spouse/partner/significant other (11%), their children (11%), other family (12%), friends (13%) or neighbors (6%).
About TradeKing Advisors, Inc.
Portfolios are offered through TradeKing Advisors, Inc. (TradeKing Advisors), an SEC-registered investment advisor. TradeKing Advisors has chosen Ibbotson Associates, Inc., an SEC-registered investment advisor and wholly owned subsidiary of Morningstar, Inc., to provide asset allocation, portfolio construction and monitoring services for the TradeKing Advisors portfolios. Ibbotson Associates is not acting in the capacity of an investment advisor to individual investors. The Morningstar name and logo are registered marks of Morningstar, Inc. Ibbotson Associates is not affiliated with TradeKing Advisors.
About TradeKing Group, Inc.
TradeKing Group, Inc. (www.tradeking.com) consists of companies that provide online brokerage services, social communities for investors, investor education and more. Its subsidiary, TradeKing, LLC, is a nationally licensed online broker/dealer dedicated to empowering the independent, self- directed investor. It offers simple, low fees. The TradeKing platform features powerful online equity, options, ETF, mutual fund and fixed-income trading tools accompanied by a rich set of news, research and analysis capabilities.
1 This survey was conducted online within the United States by Harris Poll on behalf of TradeKing Group from September 5-9, 2014 among 2,013 adults ages 18 and older. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables, please contact Sue Parente at firstname.lastname@example.org.
2 “Would-be investors” are defined as those who have ever considered investing or talking to a live financial advisor.
TradeKing Group, Inc. is not a broker/dealer. Ibbotson Associates, Inc. is not an affiliate of TradeKing Group, Inc.
All investments involve risk, which may include the loss of income payments as well as some or all principal invested. Asset allocation and diversification does not necessarily eliminate the risk of experiencing investment loss. TradeKing Advisors does not warrant or guarantee its process will lead to success. Past performance does not guarantee future results.
Risks applicable to any portfolio are those associated with its underlying securities. Please see the TradeKing Advisors Disclosure Brochure for further information. Before you invest, you should carefully review and consider the investment objectives, risks, charges and expenses of each exchange-traded product (ETP) that are to be used within TradeKing Advisors’ portfolios. ETP trading prices may not necessarily reflect the net asset value of the underlying securities. You are able to review and download ETP product descriptions via the Securities and Exchange Commission’s (SEC) website at http://www.sec.gov/edgar/searchedgar/webusers.htm#.U0me6lcVDM0
Please refer to Form ADV Part 2A for detailed information pertaining to the following topics: Pricing and Fees – Item 5; Investment Strategy and Risks – Item 8.
This is not an offer or solicitation in any jurisdiction where we are not authorized to conduct investment advisory business. Brokerage accounts are serviced by TradeKing, LLC and advisory client account assets are custodied with Apex Clearing Corporation, Members FINRA and SIPC. TradeKing Advisors and TradeKing, LLC are wholly owned subsidiaries of TradeKing Group, Inc.
Please visit https://www.tradeking.com/education/disclosures to learn about risks associated with investing.