Subscribe
Sign up for timely perspectives delivered to your inbox.
Janus Henderson’s latest Investor Survey examined the impact of professional financial advice on investor behavior. Matt Sommer, Head of the Specialist Consulting Group, discusses the findings and their implications for advisors.
One of the top-line results of Janus Henderson’s latest Investor Survey was that close to 70% of respondents reported having a financial advisor and, among this group, 98% reported being very or somewhat satisfied with the quality of the relationship (see my previous article for more on this finding).
Beyond levels of client satisfaction, however, we were also interested in learning about key differences between advised and do-it-yourself investors. Specifically, we sought to answer the question: “Does working with a financial advisor offer benefits beyond investment advice?”
First, we examined investors’ confidence in their ability to meet their financial goals: 32% of respondents reported having high levels of confidence, while 57% reported being somewhat confident. Only 11% reported having little to no confidence.
The key finding, however, was that having a financial advisor was statistically associated with higher levels of confidence compared to not working with an advisor. Possessing confidence is an important investor trait: Research has shown that investors with high levels of confidence are more likely to maintain a long-term perspective and stay the course during periods of market volatility.
Second, we asked respondents if their emotions have caused them to make investment mistakes. Nearly three-quarters said “no,” and these respondents were statistically more likely to have an advisor compared to not having an advisor.
Keeping emotions in check is critical to staying on track to long-term investing goals. Market research firm Dalbar consistently reports that investors underperform the broader markets by a wide margin.1 This discrepancy is largely attributable to the emotional biases that cause investors to fall into the trap of buying high and selling low.
These findings from Janus Henderson’s latest Investor Survey provide strong evidence that the value of a financial advisor extends well beyond investment advice. Based on these findings, there are several actionable next steps for advisors to consider.
If you would like more information about our Investor Survey, or the ideas outlined above, please contact our Wealth Strategists.
1 “Evaluating the Gap between Fund Performance and Investor Returns.” Index Fund Advisors, August 2023.