Who Seeks Financial Advice from a Financial Planner?

Abstract

In this paper, we examine factors that motivate people to seek financial advice from financial planners. Data from a national survey conducted by the Consumer Financial Protection Bureau in 2016 was used in the analysis. We discovered that essential factors, such as subjective norms, financial knowledge, financial risk tolerance, and personal traits, have a positive impact on an individual's decision to seek advice from financial planners. On the other hand, financial stress caused by financial constraints has a significant negative effect. This study also found that contrary to previous research, minorities are more likely to seek financial advice from planners. However, when examining different financial asset domains, such disparities across racial groups decreased. This study contributes to the literature by providing new insights into the decision-making process when it comes to hiring financial planners and how individual socioeconomic and psychosocial characteristics can influence this choice.