Financial advisors key to retirement planning and security

The recently completed OppenheimerFunds Investing for Retirement Survey demonstrates the value of professional advice for Baby Boomers. Investors who use an advisor benefit from their expertise and guidance, while for those surveyed who do not, an advisor could help get them started on the right track. (Related article: Americans need retirement planning help)

"Our study points to the need for Boomers to work with advisors who can create workable plans that enable them to simultaneously save for the future and take care of everyday bills and expenses, " said Jim Ruff, President of OppenheimerFunds Distributor, Inc. "Advisors can help clients live more efficient financial lives."

Despite a high level of confidence in their own investing abilities, 67% of Smooth Sailors (Prepared and Unconcerned) have a professional financial advisor. Respondents in this group say using an advisor makes them even more confident in their investing abilities and about their retirement preparation. (Related article: Are you prepared for retirement?)

Nervous Nellies (Prepared and Concerned) are the most likely group to have a financial advisor (85% do) and are less likely than others to make the majority of their investment decisions on their own. Only 39% of Unrealistic Optimists (unprepared/unconcerned) have a financial advisor and few regularly use their financial advisor's help. Three-quarters of this group say they make more than half of investment decisions themselves. (Related article: How to make personal financial decisions?)

"When it comes to financial planning, the 'me generation' needs to become the 'we generation,'" said Murphy. "Many boomers are trying to put together their own plans, but lack the skills and resources financial professionals offer to properly assess risk and define specific goals."

In looking at financial planning and goals, one of the biggest factors detracting from boomers' ability to realize their retirement dreams is debt. Advisors should help investors factor debt reduction and living within means into retirement planning early on.

"Boomers will continue to redefine retirement as they expect to work longer and work for pay in retirement," said Murphy. "This will likely result in major changes for the role of financial advisors."

Recommended article: How to get started with retirement planning?

The survey was conducted between September and October 2004 among Americans ages 45 to 75 with household incomes of at least $75,000 or household savings and investments of at least $300,000 (not including primary residence). It measured the views and attitudes of working boomers and retirees regarding retirement, preparations for retirement and confidence in retirement planning. Six hundred workers and 401 retirees were surveyed. The telephone interviewing was conducted by Matthew Greenwald & Associates, a leading market research firm focused on retirement planning based in Washington D.C. The margin of error (at the 95% confidence level) for the total number of respondents in this study (1,001) is a plus or minus 3.2 percentage points.

Source: Oppenheimer