A recent survey by wealthmanagement.com and Transamerica shows clients frequently take action well after their financial professionals recommend they do. For example, purchasing mutual funds as soon as possible can help clients share in more of the market’s growth potential as they pursue retirement goals. But more than 40% wait until their 30s to start purchasing mutual funds.
Whether opening brokerage accounts or purchasing long-term care insurance, most clients opt to take action roughly five to 10 years after their financial professionals recommend these products to them. In some cases, these delays mean clients take actions an entire life stage later than suggested.
Delayed activity doesn’t necessarily mean clients are ignoring advice, however. Bertrand suggests that clients early in their careers simply may not feel like they have the resources they need to do what their financial professionals are telling them to do. “If you’re between 25 and 35, a brokerage account is probably about the last thing in line to get funded,” he says.
He points out that the reason for delay could easily involve saving up for a house, paying off credit card debt and student debt, and then funding their retirement account. By understanding a client’s priorities, financial professionals can step back from financial rules of thumb and create a more holistic plan tailored to individual needs. This approach could help clients understand how acting earlier will benefit them—and help them reach their financial goals.