Finra: Most Investors Use FAs and are OK with Fees
A recent survey found that the majority of U.S. non-retirement account investors are working with financial advisors, and that most aren’t concerned about conflicts of interest.
Fifty-six percent of investors use a broker or advisor, according to a survey of 2,000 respondents with investments in non-retirement accounts, conducted by Finra. Among people working with professional advisors, 57% don’t worry about their advisors’ sales incentives creating conflicts of interest, Finra found. And among investors overall, including those who don’t use advisors, 70% believe they’re paying reasonable fees for their investment accounts.
However, the survey also found that investor literacy is lacking. Men, on average, were able to answer just 4.9 questions correctly on a 10-question financial literacy quiz. And that number fell to 3.8 for women, according to Finra. Interestingly, women were far more likely to say they didn’t know the answer than men — despite the average number of incorrect answers being 3.8 for both genders, the industry’s self-regulator says.
The survey also found a wide generational gap in approaches to investing that advisors may want to take into account.
While 38% of investors age 18 to 34 use robo-advisors, for example, that figure drops to only 4% for investors 55 and up. At the same time, only 28% of older investors are concerned they could be victims of investment fraud, while for younger investors that figure is 61%, the survey found.