A New Era of Financial Planning: Americans Seek Professional Guidance
The outcome of the 2024 presidential election has triggered a significant shift in Americans’ attitudes toward their personal finances. As a result, demand for professional financial advice has surged, indicating a widespread desire to reassess and adjust financial plans.
Market Performance and Expectations
During the last Trump presidency, the S&P 500 saw an impressive annualized return of 10.22%, inflation-adjusted. Investors are now hoping for a repeat of this performance premium in the coming four years. Promised deregulation and potential changes to the tax code may also be driving this sudden increase in demand for professional financial services.
Consumers Take Action
Internal data from SmartAsset, a company that connects consumers with financial advisors, reveals a significant spike in demand for advisors starting after November 6. The week of November 10th saw the highest demand for financial advisors all year, with over 9,000 individuals seeking advisors through SmartAsset in just a seven-day period. Google searches for “financial advisor near me” also increased sharply, with an estimated search volume of over 27,000 per month in December.
Regional Hotspots
New York City and Philadelphia saw the largest statistically significant increases in demand post-election. In the month leading up to the election, Manhattan residents made up an estimated 3.12% of all consumers searching for financial advisors, which increased to 3.55% in the month following the election. Similarly, Philadelphia residents made up 1.03% of consumer leads pre-election, and 1.35% afterwards.
The Value of a Financial Advisor
Evidence suggests that several factors can improve the lifetime value of an advisor-client relationship. Starting at a younger age and initiating a client-planner relationship with a higher starting net worth can yield greater benefits. According to SmartAsset’s proprietary model, the impact of an advisor on a client’s lifetime net worth can range from an estimated 19% to 212%, depending on factors such as age, income, retirement age, and other factors.
A Promising Landscape for Financial Advisors
The data suggests that the landscape looks promising for the financial advisor industry, with more Americans looking to capitalize on administrative changes for their own personal benefit. Historical trends indicate that consumers may have ample opportunity to improve their financial standing over the next four years. If you’re interested in connecting with a financial advisor, you can use this free tool to get matched.
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