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Diverse Americans are re-engaging with professional financial advisors in 2023, rebounding from a drop reported in 2022, according to the Allianz Life 2023 annual consumer survey of Americans’ views on retirement planning.
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Indeed, according to the survey, 36% of Black Americans reported having a professional financial advisor in 2023, up from 24% in 2022.
This is a reversal of the previous year, which saw Black Americans’ usage of professional financial advisors decline to 24% in 2022 from 38% in 2021.
In addition, Hispanic investors report similar shifts in working with a professional financial advisor, rising to 42% in 2023, from 35% in 2022.
Travis Walker, business solutions and diversity consultant, Allianz Life, attributes this stunning reversal to continued market volatility, ongoing financial crises, rising interest rates, inflation and other factors, which have made many Americans more concerned than ever about their financial futures.
“It’s encouraging to see diverse investors’ interest in financial planning on the rise, however the differing trends from year to year show that more needs to be done to better serve this population,” said Walker.
Another key finding of the survey is that Black Americans, more than any other group-23%- say that having an advisor with “similar characteristics to me, such as similar age, gender, race” would make them more likely to work with a financial advisor.
According to Walker, this is due to investors looking for a financial advisor who understands their needs, priorities and preferences.
“Our data shows that there is some variability among ethnic groups in how they prefer to work with a financial professional, and the kinds of subjects they want to discuss with their financial advisor,” he said. “For Americans who may have felt misunderstood or just generally unsatisfied in their interactions with financial professionals in the past, working with someone with a similar background, and similar lived experiences, can go a long way toward making them feel more comfortable discussing their finances.”
He added that as retirement planning is very personal, having a good rapport and feeling confident in your relationship with your advisor is key to developing a successful plan.
In terms of topics they have not discussed with a financial advisor, but would like to, there are also significant differences among these diverse groups of investors, compared to the overall population, according to Allianz.