Survey: Americans don’t trust themselves with money

Americans have always trusted themselves above anyone when it comes to money. But, according to a recent survey conducted by The Harris Poll, Americans don’t rate themselves the highest anymore.  

The survey, conducted on behalf of Northwestern Mutual, checked in with 2,300 Americans.

What has the survey shown?

The same survey was conducted in 2020, and the most common response to ‘Who is your most trusted source of financial advice?’ was ‘Yourself,’ with 30% of the vote.

When this survey was conducted in 2021, the answer ‘Yourself’’ had fallen to only 20% of the vote. Instead, respondents put ‘Financial Advisor’ at the top, with 26% of the vote.

What caused this response?

Experts working for The Harris Poll put this change in response down to the COVID-19 pandemic. Living in more financially unstable times, people have turned to expert advice to steer them through the storm. Whereas, before the pandemic, 29% of Americans worked with a financial advisor; this number has jumped to 38% of Americans in 2021. To contextualize this, that means almost four in ten Americans have a financial advisor.

Interestingly, the trend of gaining a financial advisor during the pandemic is most prevalent in the younger generations. 23% of Millennials and 23% of Gen Z have gained or plan to work with a financial advisor.

Tim Gerend, chief distribution officer at Northwestern Mutual, had this to say of these results: “It’s encouraging that younger people are taking action with their finances, as this is a crucial step towards creating positive financial planning habits and achieving financial security over the long term. This study data reflects trends we’ve been seeing amongst our clients as well – the pandemic has prompted many to revisit their financial plans and seek help from their advisors.”

This shouldn’t come as a surprise – financial advisors like Ashish Bhandari have a wealth of knowledge that can help those who lack any experience in the financial sector. 

Is this good or bad news for American finances?

Depending on how you look at the results, you can find bad and good conclusions. For one, these trends show the impact of the COVID-19 pandemic on Americans’ finances. The turn towards financial advisors hints that more Americans are struggling to keep financially safe this past year.

However, Americans seeking out financial advice from professionals does give a positive light to the data. Gerend says the data shows a positive story, as people’s trust in financial advisors is beneficial for the future. He notes that:  “A good advisor will help protect you against the risks of what can go wrong (think insurance) and help take advantage of opportunities when things go well (think investing).”

Overall, the survey tells us how Americans are doing financially in these uncertain times.

How have you been dealing with the pandemic financially? Does your experience match up with the results from the survey?