Aug 02, 2018 - 9:00am

When It Comes to Saving for the Future, One Size of Financial Advice Does Not Fit All


Director, Center for Capital Markets Competitiveness

Empowering Investors

No two Americans are the same. We come from different backgrounds, and we have different goals, different lifestyles, and different needs. We also have different financial situations, so it’s a good thing that, in the complex world of investing, there are several types of financial professionals to help people save for their futures.

What is best for one investor may not work for another. We all have different needs based on our goals, our age, the amount we are able to save, and other factors, including how much advice we want in order to make investment decisions.

People save money for all kinds of reasons: getting married; college tuition for their kids; starting a small business; buying a house for the first time; retirement; kids’ inheritance; or just simply building up a rainy-day fund. Some investors benefit more from a brokerage account, where they can pay their broker-dealer on a commission basis, while it makes sense for other investors to use an advisory account, where they pay a fee for ongoing advice and portfolio management.

In short, in the world of investing, one size does not fit all.

Thankfully, financial professionals are there to help. According to a recent poll of American investors, the three largest benefits investors say they get from working with a financial professional are peace of mind, an understanding of complex issues, and time savings.

The poll also found that only a slight majority of investors, 56%, feel that their financial professional is explaining their investment options completely, and 36% feel their options are mostly being explained to them. This means that about eight percent of investors feel at least somewhat uninformed. We need to close that information gap.

The Securities and Exchange Commission (SEC) recently proposed regulations to ensure broker-dealers and investment advisers are keeping their clients’ best interest in mind and giving investors the information they need to understand their options. It is critically important to ensure different investors have access to different types of services and products, but they also need to fully understand the choices they are making. Additional disclosures, if communicated effectively, would be a welcome addition to the regulatory safeguards and good practices already in place.

Every American has expenses to pay, and every American wants to save for their future. But the way each person accomplishes those goals is unique, and that diversity should be preserved. As regulators and policymakers consider next steps, the overarching objective should be to make sure every investor understands their options and can make informed decisions about what works best for them.

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About the Author

About the Author

Samantha DeZur, Director, Center for Capital Markets Competitiveness
Director, Center for Capital Markets Competitiveness

Samantha DeZur is a director at the U.S. Chamber of Commerce's Center for Capital Markets Competitiveness, where she leads the derivatives and asset management portfolios.