When it comes to financial services providers, many Americans don’t necessarily associate them with trust. Recently, we’ve witnessed Big Banks like Wells Fargo and CitiBank making headlines for opening millions of fraudulent accounts (in the case of the former) and overbilling investment clients (in the case of the latter). Celebrities like Johnny Depp have lost millions to financial advisors who allegedly failed to act with his best interests in mind. And the Department of Labor’s Fiduciary Rule, which mandates that all financial professionals act in their clients’ best interest when it comes to retirement accounts, is currently slated to go into effect June 9; however, it’s expected to face overturning or modifications before full implementation on January 1, 2018.
It’s no wonder that Americans are wary of their financial service providers and are worried that they may not be able to reach their retirement and other long-term financial goals.
Personal Capital developed the 2017 Financial Trust Report to assess Americans’ level of trust in financial advisors, awareness of what they are paying in investment account fees, feelings about access to their financial data and outlook on their financial future. The findings show that, not surprisingly, Americans are struggling with who to really trust with their financial futures.
Some key findings include:
- Consumers are suspicious of financial advisors – nearly one-third of Americans believe that a financial advisor is likely to take advantage of a consumer
- Big Bank scandals leave consumers feeling jaded and untrusting – 70% of Americans expressed that recent events in the financial industry have made them question the trustworthiness of financial professionals
- Knowledge of fees is woefully low – 21% of investors know they pay fees on their investment accounts, but are not sure of the fee amounts
- Americans put trust in financial advisors who are not working in their best interest – Nearly half of Americans believe all financial advisors are required by law to always act in in their clients’ best interest (whereas only advisors who are true fiduciaries, like Personal Capital, are legally required to provide this type of investment advice)
There are plenty of challenges American investors face when it comes to their finances, from accessing all their financial data, to finding a financial advisor they can trust. But there is light at the end of the tunnel. Free tools, such as the ones offered through Personal Capital, can give insight into your whole financial picture, which helps you understand what fees you’re paying, as well as build a long-term financial plan. And just as importantly, Personal Capital acts as a fiduciary, so our advisors are legally obligated to always act in your best interest.
To learn more about how Americans feel about their financial advisors, fees and future, download our free Personal Capital 2017 Financial Trust Report.