February 21, 2024

In today’s turbulent economy, many Americans feel they cannot afford to work with a financial advisor. A new study shows why they can’t.

Russell Investments, a Seattle-based international investment firm, collected data from the past decade — including a brutal 2022 — to show why sound financial advice is more important than ever. For any advisor trying to recruit new clients or retain existing clients, research outline This could be a very convincing pitch.

“Sometimes advisors don’t have confidence in the value they’re really bringing to clients,” said Tina Downing, senior director of advisory and intermediary solutions at Russell Investments. “That’s really one of the reasons we created this study: to help them think about all the things they’re actually doing for their clients and be able to articulate it.”

To put it mildly, the economy of the 2020s is difficult to navigate alone. In 2022, the S&P 500, Nasdaq, and Dow all suffer Worst years since 2008the S&P index fell 19.4%.

In a historically rare combination, bonds suffered simultaneously.For example, by the end of 2022, the Barclays U.S. Aggregate Bond Index is down 13% – its worst year on record.

At the same time, both inflation and interest rates are soaring. Year-on-year growth rate of consumer price index in the first half of 2022 jumped to 9.1%, which is the highest point in four decades.To reduce this, the Fed has raised the federal funds rate to more than 5% – the highest level since 2007.

Despite all these challenges, few Americans turn to financial advisors for help.Only 35% of U.S. adults will work with a wealth manager by 2022, according to a survey Edelman Financial Engines reporta financial services company based in Santa Clara, California.

Russell Investments explains why the other 65% should reconsider. As highlighted in the study, here are three key benefits of working with a financial advisor: