SUNNYVALE, CALIF.--(BUSINESS WIRE)--Americans tend to have a tough time determining if their investment advisor is on their side, but they clearly want their advisor in their corner, according to a new survey from Financial Engines (NASDAQ:FNGN), America’s largest independent investment advisor.1 Seventy-seven percent of those surveyed said they would support legally requiring all financial advisors to put their clients’ best interests first when providing retirement investment advice. A similar amount, 73 percent of respondents, said they felt it was very important that all financial advisors be legally required to meet this standard.
The Financial Engines survey also shows just how confusing the financial services playing field can be for retirement investors. Almost half (46 percent) of Americans mistakenly believe that all financial advisors are already required to put their clients’ interests first when providing retirement investment advice. Among those currently working with financial advisors, 41 percent said that they were not sure if their advisor was a fiduciary or not.
Part of this confusion may be fueled by industry jargon. For instance, only 18 percent of those polled said that they knew what it meant for a financial advisor to be a “fiduciary.”
The Financial Engines survey of 1,018 adults comes in advance of the widely anticipated “conflict of interest” rule from the United States Department of Labor. The rule could require all financial advisors who provide advice on retirement assets to serve as fiduciaries, legally required to put their clients’ best interest ahead of their own. Currently, financial advisors are legally permitted to steer retirement assets into investment funds that are not necessarily in their clients’ best interest but deliver commissions to the advisor. The new rule is expected to curb that practice.
“Our research shows that even if people may not fully understand the intricacies of who is a fiduciary and who is not, they have a clear preference for advisors who are legally required to put their clients’ best interests first,” said Christopher Jones, chief investment officer at Financial Engines. “Financial Engines has served customers as a fiduciary for nearly 20 years. We have been supportive of the U.S. Department of Labor’s proposed conflict of interest rule because we feel it’s the right thing for both investors and the industry.”
Copies of the survey, “In Whose Best Interest? What Americans know and what they want when it comes to retirement investment advice,” can be found at corp.financialengines.com/docs/Financial-Engines-Best-Interest-Report-0316.pdf.
About Financial Engines
Financial Engines is America’s largest independent investment advisor. We help people make the most of their money by providing full-service financial planning, including professional investment management and advice. Headquartered in Sunnyvale, CA, Financial Engines was co-founded in 1996 by Nobel Prize-winning economist William F. Sharpe. We serve as a comprehensive financial advisor for our workplace customers, and offer help to more than nine million people across over 650 companies (including 142 of the Fortune 500). Our unique approach, combined with powerful online services, dedicated advisors and personal attention, promotes greater financial wellness and helps more Americans to meet their financial goals.
For more information, please visit www.financialengines.com.
All advisory services provided by our investment advisory subsidiaries, including Financial Engines Advisors L.L.C. and a nationwide system of registered investment advisors known as The Mutual Fund Store. Financial Engines does not guarantee future results.
Forward-Looking Statements
This press release contains forward-looking statements, including statements regarding the use of professional investment and financial planning help, which involve risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties are outlined in our SEC filings. You are cautioned not to unduly rely on these forward-looking statements, which speak only as of the date of this press release. Unless required by law, Financial Engines undertakes no obligation to publicly revise any forward-looking statement to reflect circumstances or events after the date of this press release or to report the occurrence of unanticipated events.
1 For independence methodology and ranking, see InvestmentNews Center (http://data.investmentnews.com/ria/).
