Financial advisers, at their best, should be working with clients to set goals, achieve results and do their utmost to aid in the accumulation phase (and beyond) of wealth accumulation.
The unfortunate part of that scenario is who can afford to hire an adviser and make use of the expertise. And the numbers appear to show the cracks. In a recent survey conducted by Bankrate.com, Americans are saying that cash investments are the best way to invest money not needed for more than 10 years.
The report says that more than one in four Americans (26%) favor cash, just beating out real estate (23%). One in six (16%) favor gold or other precious metals, even though those investments have not fared well this year, while only 14% say stocks would be their choice. Just eight percent of Americans chose bonds.
Says Greg McBride, Bankrate.com’s Senior Financial Analyst: “Americans not saving enough is well-documented, but hunkering down in cash investments and settling for low returns will only magnify the problem of not having a sufficient nest egg to meet longer-range financial goals such as retirement.”
Yet if looked at based on income, the numbers tell an even more alarming story. Cash investments were favored by 32% of people with high school education or less. And for people making six figures or more – 34% said their investment of choice was stocks.
So the divide appears to be connected to income and education levels. That is where advisers can play, not just a financial role, but an educator’s role as well.
The question becomes how can you reach employees with high school education or less who perhaps cannot afford an adviser or are not interested in working with one.
There might be opportunity to reach out to employers and understand their demographics. How old are the workers, what are their education levels (without delving into privacy issues) and then offering and tailoring messages via the workplace. Financial advisers can go to school boards, classrooms and union halls to provide education that will, hopefully, create smarter investors, but at the same time future clients.
With more Americans coming back to work and looking at retirement savings again, there is a place beyond the traditional role where advisers should be looking to improve the notion of what it means to be a smart and educated saver.
Joel Kranc is Director of Kranc Communications, focusing on business communications, content delivery and marketing strategies. He has written and worked in the retirement and institutional investment space for 17 years covering North American markets, large institutional pensions and the adviser community. firstname.lastname@example.org.
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