AUSTIN, Texas--(BUSINESS WIRE)--Herbers & Company, an independent, business management consultancy, found in its inaugural consumer financial behavior study that people who use a financial advisor are thrice happier than those who manage their own finances. Specifically, individuals who had a financial advisor were more fulfilled, grateful, intentional, and pleased with their impact on the world—which they cite as four predictable keys to happiness—than those who did not have a financial advisor. And for those with large sums of wealth who did not have a financial advisor, their unhappiness got progressively worse the more money they accumulated. This body of academic research has defined that not only are financial advisors critical to a person’s financial security, but they can also help with their emotional and mental well-being.
“The study findings are fascinating because it shows the power of financial planning on well-being. By hiring a financial planner, people are happier with their lives,” said Sonya Lutter, PhD, CFP, LMFT, director of institutional research and education at Herbers & Company. “Working with a financial advisor accelerates joy in other key areas in our lives because people who have financial advisors were not only happier with their finances, but they were also far more pleased with their personal relationships and their communication with their partners.”
The Herbers & Company methodology:
- The consultancy company designed the questions derived from psychotherapy core principles that delved into consumers’ daily behaviors and interactions to determine happiness.
- Herbers & Company worked with a reputable, third-party surveying firm to distribute those questions to its sampling pool through email.
- One thousand American adults who self-identified as having $250,000 or more in assets participated; they were evenly split along gender lines and represented all U.S. geographies and adult age groups.
- The survey was blinded, meaning respondents didn’t know the industry or firm that commissioned the survey.
- Herbers & Company goes beyond reporting poll data to conduct academic research with multivariate analysis.
Two thirds of the respondents had a financial advisor in place prior to taking the survey while one third did not. Those who had a financial advisor had higher responses in all four of the key areas of happiness regardless of their gender, age, income, or asset level.
Additionally, the study found that the amount of happiness a person achieved from having a financial advisor significantly increased once a consumer accumulated $1.2 million in assets—and markedly decreased by four standard deviations for people without a financial advisor. The rapid decline in unhappiness from $1.2 through $6 million in assets shows that those who have more wealth aren’t happier unless they’ve hired a financial advisor. Similarly, people working with a financial advisor were consistently above average in happiness, fulfillment, intention, impact, and gratefulness with a rapid increase in cumulative happiness over $1.2 million in household assets.
“For those who make it to the top five percent of wealth in the United States, working with a financial advisor can mean the difference between financial success or allowing money to decrease their happiness, which is a critical perspective to have,” Dr. Lutter added. “We all realize that money factors into our happiness somehow, but this study spells out in greater detail just how much managing large sums of money on your own can weigh on a person’s well-being and literally lessen their happiness. Working with a financial advisor sooner, rather than later, is a link to happiness.”
So, while money alone has not yet been proven to make someone happier, having a professional help people plan and manage their money has, according to this study.
To access this academic research study, click here.
Herbers & Co. is full-service strategy, management and innovation consultancy serving independent advisory firms of all shapes and sizes. Its mission is to reformulate, modernize and expand advisory firm growth. Leaders turn to us to increase revenue, profit, and enterprise value through growth strategies, human capital management, advisor training programs, operational efficiency, succession planning, leadership programs, and best practice client experiences and digital innovations. We have worked with over 10% of the total multi-billion-dollar independent financial advisory firms in the US and maintain real-time trends about what is most important/impactful to the financial advisory industry.
