|[August 21, 2013]
29% of Clients Withhold Critical Information from Their Financial Advisors
ST. PAUL, Minn. --(Business Wire)--
Financial advisors know some of their clients don't tell them everything
about their personal finances. The bigger questions are: How many
clients? What are they withholding? Why?
For its report, "Client
secrets: What people don't tell their financial advisors," Securian
Financial Group surveyed 720 consumers who work with financial advisors.
Nearly one-third (29%) say they haven't told their advisors about
everything that could affect their finances.
What they're hiding
"They may not realize it, but personal
matters can profoundly affect a family's financial stability," said Michelle
Hall, manager, Market Research. "Health and marital difficulties
rank high among the critical subjects clients do not discuss with their
advisors." More than one-fourth (25%) carry debt their advisors do not
Who they are
A sizable portion of those who withhold
critical financial information from their advisors appear -
demographically at least - to fall in many advisors' target markets:
Nearly one-third are pre-retirees and retirees. Two-thirds are 40 and
One-fifth are affluent, with $150,000 or more in annual household
income, or mass affluent, with $100,000 - $149,000 income.
Among those who are employed, two-thirds are in professional or
Why they keep secrets
More than half (52%) of those with
secrets say the information i too personal to share. Another large
group (45%) says their secrets are outside of their financial strategies
and don't need to be shared. These responses may suggest a lack of
education about the benefits of holistic planning and a need to raise
awareness about the financial risks associated with not sharing these
matters. One fifth say their secrets are too embarrassing to reveal.
Some people may hold back because
they don't want to hear what their advisors would say if they had the
full picture. When asked what changes their advisors likely would
recommend, half (50%) said increase savings or reduce spending.
One-fourth (25%) said their advisors would want to create new financial
Nearly half (48%) of all respondents say
trust is the most important aspect of their advisor relationships.
Forty-three percent say they discuss other personal issues with their
advisors. Of the 29% who withhold critical information, only 11% say
it's because of a lack of trust.
What advisors say
Preuss with The Healy Group in South Bend, IN says he's not
surprised by the 29%, though he doubts the percentage is that high among
his clients because his relationships are strong.
"You have to understand what's important and what's driving them," said
Preuss who has been a financial advisor for 31 years. He says, however,
that trust is a two-way street.
"I make sure up front that they know I can only help them as much as
they reveal to me," he said.
Twedt, Twedt Financial Services, has been an advisor for 34 years in
Lake Mills, IA. When clients withhold information that could affect
their financial plans, he doesn't pry.
"Some people are embarrassed to provide information so I don't ask. Once
they get comfortable, it's amazing what they reveal," said Twedt.
"Quality advisors are counselors," he added. "It's not just about the
clients' money: It's about their dreams, their fears, their families."
Like Twedt and Preuss, Nicole
Winter Tietel of Winter & Associates in St. Paul, MN also feels her
client relationships are strong. But she worries about people who don't
share important facts with their advisors.
"If they keep secrets they likely have duplication in their investment
portfolios, are underinsured or carry debt that eats away at their net
worth," said Tietel.
"Ultimately, they are taking more risk."
About Securian Financial Group
Since 1880, Securian
Financial Group and its affiliates have provided financial security
for individuals and businesses in the form of insurance, investments and
retirement plans. Now one of the nation's largest financial services
providers, it is the holding company parent of a group of companies that
include Minnesota Life Insurance Company and Securian Life Insurance
Company, a New York admitted insurer.
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