Clients want more advice on savings, but are you giving them enough?

Americans are seeking guidance on how to save or invest their cash but often feel that there is a lack of support from most financial advice channels.

A new Hearts & Wallets intelligence report based on data from almost 6,000 households confirms savings and investments as the most taken financial actions over the last year (79% did so) with two thirds planning to do so. Half of the cohort cut spending.

Breaking down the stats further, 29% increased saving for retirement (12% reduced this), 25% deposited cash in a savings or taxable brokerage account for general saving, 24% started an emergency savings account for the first time, and 11% invested in a college savings plan.

Almost three in ten households changed their investment mix and 27% purchased life insurance.

When seeking investment information, the report shows that 61% use online channels, but that this has not increased in the last three years and only 5% rely on planning tools, company websites, or mobile apps as their primary source.

The analysis found that most current financial advice experiences do not include information on how to allocate savings across different account types.

“Firms can differentiate competitively with saving and other advice that aligns with consumer demand,” Laura Varas, CEO and founder of Hearts & Wallets, said. “How to allocate saving across account types is a complex decision that balances liquidity spending needs and current taxes with serious long-term tax implications.”

SELF-DIRECTED INVESTING

Additionally, the preference to self-direct investments is at its lowest (at 59%) since tracking begin in 2010 (when it was 64%). There has been a trend away from delegation of investment decision making over the 15 years covered (from 20% in 2010 to 15% in 2024).

However, the last five years has seen the percentage of households using a hybrid (general contractor) approach has trended higher (15% in 2019 to 26% in 2024).

Households used fewer sources of financial advice in 2024 than they did in 2023, with statements and employer-sponsored programs showing the largest pullbacks, while partner/spouse (47%) and financial professionals (25%) were the top two sources nationally.

Paid investment professionals were more than twice as likely than other financial professionals to be the primary or go-to source with “fin pro paid a flat fee or a percentage of your investment assets” outpacing brokers and registered investment advisors.

“Contrary to popular belief, many customers of traditional full-service firms say they are general contractors or self-directed,” said Beth Krettecos, Hearts & Wallets subject matter expert, said. “Among households with $3 million-plus in investable assets, we find education levels and industry of employment play roles in investment decision-making preference. This reinforces the need for firms to consider a client's background and preferences to enhance engagement with service models that work for different client groups.”