Need a boost in confidence for your financial plans? Maybe it’s time to consider working with a financial advisor. Per the new TD Wealth Retirement Readiness Study, six in ten business owners worked with a financial advisor this year, and many said the guidance they received also boosted their confidence. Of the business owners polled, 55% who worked with a financial advisor said they are more confident, compared to 43% who did not.
And it makes sense. By working with a financial advisor, business owners can validate their own investment ideas, a move that can be particularly helpful during times of economic uncertainty. Among business owners working with a financial advisor in 2021, 76% increased the times they talked to their advisor during the year. (And the younger business owners did this more so than their older counterparts.)
“Financial advice moved to center stage over the past eighteen months, as business owners sought out personalized advice and investment opportunities to meet their shifting needs,” says Alyson Klug, Head of U.S. Wealth National Sales at TD Bank. While DIY investing is popular, investors must be comfortable going it alone, have the right information at their fingertips, and the time to be successful. “If any of those three pieces are missing, there is value to be found with having a financial advisor relationship to help ensure greater confidence and create a goals-based financial plan,” she says.
RETIREMENT PREPAREDNESS IN TIMES OF UNCERTAINTY
The second year of the pandemic didn’t derail confidence in retirement preparedness as much as we might have thought — the survey found 95% of business owners surveyed were confident about their retirement, compared to 82% in 2020. What’s more, 97% said they expect their current financial plans to generate the necessary income needed during retirement, up from 94% a year earlier.
So, what’s making these business owners confident about their retirement readiness despite the pandemic, record high inflation, and an ever-volatile stock market? Extra cash, a rising stock market, and help from professionals were among the top reasons.
“Almost everyone became hyper aware of their health, family, and finances during the pandemic,” says Ken Thompson, Head of U.S. Wealth Shared Services, TD Bank. “The market coming off its lows and continuing to build through 2020 and 2021 was also a big help.”
STAYING THE COURSE EASES CONCERNS
Despite recent economic uncertainty, 62% of business owners stayed the course with their investments this year. Meaning they didn’t react to the news of the day by selling low and buying high. In the early days of the pandemic, the markets declined significantly, driven by panic selling. The investors who didn’t sell their securities came out ahead. Many credited their financial advisors for preventing them from making costly mistakes.
BUSINESS PIVOTS BUILD CONFIDENCE
The increased confidence business owners are expressing in their retirement plans was also driven by a shift in mindset during the pandemic. Many business owners were forced to adjust their operating models and pivot into new areas. It was frightening, but they did it anyway and many were successful. That gave them confidence in their own judgment, which spilled over into their approach to saving for retirement. That optimism from overcoming a challenging situation should carry into the future, says Thompson.
ADVISORS ACT AS CONDUIT TO ADDITIONAL AREAS OF FINANCIAL ADVICE
While a financial advisor might not be the first person a business owner may think of when seeking business advice, in 2021, financial advisors proved their value. Of the business owners who worked with an advisor, 82% were satisfied with the business support they provided.
“A financial institution and advisor not only can help business owners with establishing financial goals and a long-term investment plan, but they can also act as an objective sounding board to help business owners navigate the many stages of their financial and business life cycles,” says Thompson.
More on HerMoney:
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- The Ultimate Retirement Planning Checklist
- HerMoney Podcast: Financial Planners, Retirement Specialists, And HSAs For Long-Term Care
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