Managing your finances can be overwhelming. However, seeking help from a financial adviser can make things just a little easier. If you’ve been hesitant to get financial advice from a professional, you should know there’s no need to be fearful. While you may feel more comfortable getting tips from friends and family, it may not be the best move when it comes to more complicated financial matters. The right financial advice can strengthen your overall financial health and put you on the road to wealth. We spoke with Cathy McCabe, senior managing director for TIAA-CREF’s institutional business division, for more on why it’s important to seek financial advice from a professional.
The Cheat Sheet: What are some reasons people don’t seek financial advice?
Cathy McCabe: While the decision to forgo professional financial advice varies from person to person, our annual TIAA-CREF Advice Matters Survey finds that professional financial advice is often misunderstood. Over the past four surveys, we’ve learned that many individuals don’t fully understand the benefits of professional advice and often assume that their financial status or lack of savings is a barrier to receiving advice.
CS: What are some myths when it comes to receiving professional financial advice?
CM: A common myth about financial advice is that it is only for the affluent. In fact, findings from our latest 2015 Advice Matters Survey uncovered that nearly half (45 %) of Americans believe they need at least $50,000 in savings to merit a meeting. No matter your age or salary, everyone can benefit from financial advice because everyone has something to work toward.
The Cheat Sheet: Why is it important to get professional financial advice?
Cathy McCabe: Financial advice encourages individuals to take the necessary steps to improve their financial future. Our 2015 Advice Survey found that respondents who have met with an advisor are significantly more confident in their retirement savings plan when compared to those who have not (78% versus 43%). Typically, financial advice leads to positive actions. Our survey found that roughly one-third of respondents who have received professional financial advice report they increased the amount set aside in savings (36%), decreased spending (29%), monitored their savings more frequently (32%) and established a plan for paying off loans or managing debt (28%).
CS: How can a financial professional help?
CM: A financial advisor can help their clients create a tailored financial plan, which includes specific strategies to help them reach their goals – whether it’s paying off student debt or estate planning. The sooner you engage an advisor, the better – it only increases the possibility of meeting your goals.
CS: Why are men more comfortable with asking for financial advice?
CM: Our findings have shown that there is a gender gap in retirement confidence – most recently seen in our 2015 Advice Matters Survey. Results showed that significantly more men said they have received financial advice (56% of men versus 43% of women). When it comes to financial advice, people often don’t know where to turn to find the right resources, and this is true for women as well. According to last year’s survey, 66% of women struggle determining what sources they can trust. Many also reported that it’s challenging to find the time and that they don’t know where to start looking for advice. Whether they work inside or outside the home, the amount of free time women have these days is very limited.
Stay tuned for part two of this discussion, where McCabe will share her tips for finding a financial professional.
More from Money & Career Cheat Sheet:
- 4 Ways to Stop Losing Sleep Over Money Problems
- How to Plan Your Great Escape from Debt
- Money Lessons You Can Learn from Your Broke Friends