Nearly one-third (29 per cent) of US clients have withheld critical information from their financial advisors, according to a survey by Securian Financial Group.
The report, “Client secrets: What people don’t tell their financial advisors,” surveyed 720 consumers who work with financial advisors. The report says some US consumers are paying good money for financial plans that will not serve them well.
“They may not realise it, but personal matters can profoundly affect a family’s financial stability,” says Michelle Hall, manager, market research. “Health and marital difficulties rank high among the critical subjects clients do not discuss with their advisors.”
More than a quarter (25 per cent) carry debt their advisors do not know about.
A sizeable portion of those who withhold critical financial information from their advisors appear – demographically at least – to fall in many advisors’ target markets:
• Nearly one-third are pre-retirees and retirees. Two-thirds are 40 and older.
• One-fifth are affluent, with GBP150,000 or more in annual household income, or mass affluent, with GBP100,000 to GBP149,000 income.
• Among those who are employed, two-thirds are in professional or managerial careers.
More than half (52 per cent) of those with secrets say the information is too personal to share. Another large group (45 per cent) says their secrets are outside of their financial strategies and don’t need to be shared. These responses may suggest a lack of education about the benefits of holistic planning and a need to raise awareness about the financial risks associated with not sharing these matters. One fifth say their secrets are too embarrassing to reveal.
Some people may hold back because they do not want to hear what their advisors would say if they had the full picture. When asked what changes their advisors likely would recommend, half (50 per cent) said increase savings or reduce spending. One-fourth (25 per cent) said their advisors would want to create new financial plans.
Nearly half (48 per cent) of all respondents say trust is the most important aspect of their advisor relationships. Forty-three per cent say they discuss other personal issues with their advisors. Of the 29 per cent who withhold critical information, only 11 per cent say it is because of a lack of trust.
