The Value of Seeking Financial Advice
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Retirement planning data gathered from an online survey at a large university in October 2009 are used to examine differences in a variety of retirement planning measures between people who have and have not met with a financial advisor. Problems of self-selection and endogeneity are addressed through the use of propensity scores. The study’s major finding is that working with an advisor is related to several important financial planning activities, including goal setting, calculation of retirement needs, retirement account diversification, use of supplemental retirement accounts, accumulation of emergency funds, positive behavioral responses to the recent economic crisis, and retirement confidence. Use of a financial advisor was not related to self-reported retirement savings or short-term growth in retirement account asset values.
KeywordsFinancial advisor Retirement planning Retirement preparedness
The research reported in this paper was supported by grants from the University of Utah’s Center on Aging and the University of Utah’s Institute of Public and International Affairs. The University of Utah Benefits Office and Kara Glaubitz also provided valuable assistance with this research project.
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