Once again proving the adage about leading horses to water, just 23 percent of U.S. workers report they have sought investment advice from a paid financial professional. And of that portion, only 27 percent claimed they followed the advice entirely, according to a study from the Employee Benefit Research Institute.
The figures came in slightly higher for retirees, with 28 percent seeking advice and 46 percent acting on the advice.
ERBI's 2013 Retirement Confidence survey considered "paid advisors" any professional financial advisor paid through fees or commissions.
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The Bureau of Labor currently counts 206,800 employed financial advisors in the U.S. and projects the sector will add another 64,000 jobs by 2020.
So why don't more workers follow through on the advice of the paid pros?
According to the survey, not trusting the advice accounted for 33 percent of workers and 48 percent of retirees.
Inability to afford the proposed plan was the reason given by 18 percent of the workers and 44 percent of retirees.
And 20 percent of those currently working (and 4 percent of retirees) claimed they had their own ideas for investing.
The survey speaks to a major issue facing the financial services industry as the government promises a new fiduciary definition.
A fiduciary, of course, is an advisor legally required to act in the best interest of the consumer along with a legal requirement of full and fair disclosure.
Consumer confidence in the industry has suffered since the financial meltdown of 2008 and the Department of Labor ruling will surely impact investment advisors and consumers alike.
The proposed definition change would define the circumstances and personnel considered fiduciaries in the industry including: retail brokers, prime brokers, institutional trading desks, swap dealers, and others who work with pension and 401(k) plans and IRAs.
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