Inflation and supply chain issues negatively impacted business owners’ retirement plans in the last 12 months, forcing many to seek advice from a financial advisor. More than eight in 10 reported working with an advisor and two-thirds made changes to their retirement plans, in a new survey from TD Wealth of more than 700 business owners.
“In a time where investors have a greater say in what they invest in, how they invest and who they invest with, financial advisors need to showcase their value,” says Alyson Klug, head of U.S. Wealth National Sales for TD Bank. “Despite the rise of automatic investing platforms, our survey shows that investors still find new investment vehicle recommendations from their advisor to be a commodity.
“Investors are looking to their advisors for help meeting their financial goals and are exploring new opportunities to do so, demonstrating that there is still value in working with a financial advisor.”
The survey found several positive trends for advisors. Confidence in reaching retirement goals is higher among those who work with a financial advisor (83% compared to 75% of those without an advisor). Further, 43% of business owners who work with a financial advisor said they have communicated more frequently with their advisor in the past year.
Amid turbulent market conditions, business owners are turning to new investment vehicles to find returns and are looking to their advisors for guidance:
- 63% of business owners reported exploring a new investment opportunity for their retirement portfolio, including digital assets (43%), private markets (40%) and environmental, social and governance-focused investments (30%).
- Among business owners who work with a financial advisor and have explored new investment opportunities, 80% received these investment recommendations from their advisor.
- “Ideas for new investment opportunities” was cited as the number one most useful piece of content from financial advisors among owners who work with them.
- Business owners continue to seek autonomy and flexibility for their personal investments, with more than half reporting that they used an automatic investing platform in 2022, including 40% who had used an automatic investing platform before last year. Over half (57%) of all owners expressed satisfaction with the automatic investing platform they are using.
Advisors have an opportunity to strengthen their partnerships with business owners as they navigate several challenges in the coming year.
“Record inflation and supply chain troubles have presented significant challenges for business owners, and while both show signs of improvement, the impacts will be felt into 2023,” says James Beam, senior vice president and, head of Investment Management, Brokerage, Planning, Retirement & Strategy for TD Wealth. “Business owners are depending on registered financial professionals to weather short-term volatility and help with the long-term success of their financial plans,”