Does Paying for Financial Advice Make People More Confident?

Are you confident in your financial plan? At various points in our lives, we’ll have to plan for big goals, such as buying a house, paying for a child’s education, or retirement. However, the volatility that life brings can shake one’s belief that they’ll be able to achieve their goals.

Because of the financial challenges people face, it’s common to seek the advice of a professional to gain clarity and be prepared for life’s biggest moments. In this study, we’ll assess the impact of hiring an advisor on one’s confidence in their financial plan, including within different age groups. Then, we’ll analyze why people may have responded a certain way and what value an advisor may bring.

Percentage of People Who Pay for Financial Advice

Before analyzing the confidence level of respondents, we first collected data on what percentage of individuals have paid for financial advice and how old they are. The following table displays this information as an overall percentage of each age group:

Age	Percentage That Paid for Financial Advice
Younger than 30	5.6%
30s	11.7%
40s	14.0%
50s	20.8%
60 and older	47.9%
Overall	18.4%

The data above demonstrates a clear trend, with the percentage of individuals who’ve paid for financial advice increasing with each age group. Specifically, the number jumps sharply from 5.6% of those under 30 to 20.8% of people in their 50s and, perhaps most significantly, 47.9% of respondents 60 years and older.

A possible reason for an increased tendency for older individuals to seek financial advice is that as people age, they’re likely to experience important financial challenges that may require the help of a professional, such as marriage, paying for a child’s education, or building a retirement plan. Because younger people, in general, are less experienced and may have fewer assets than their older counterparts, they may not yet see the value of hiring an advisor. For instance, the median net-worth for 20-year olds sits at $7,467, much lower than $290,271 for those in their 50s, according to data from Empower.

Another factor of note in the data is the overall percentage of 18.4%. While this is a significant number, it still sits higher than those in their 20s, 30s, and 40s. Again, this indicates that younger individuals, in general, may be less likely to hire an advisor.

Impact of Advice on Confidence in Financial Plan

How big of a difference does hiring an advisor make in your confidence in your financial plan? To understand this impact, we gathered data from respondents based on their confidence in their financial plan, on a scale of one to five (five being most confident).

In the table below, you’ll find the percentage difference in confidence between those who have and haven’t paid for financial advice and their corresponding age groups:

Age	Avg. Conf. with Advice	Avg. Conf. without Advice	Difference in Conf.
Younger than 30	3.14	2.57	22.0%
30s	3.05	2.63	19.0%
40s	3.06	2.70	16.4%
50s	3.08	2.79	14.0%
60 and older	3.10	2.79	11.1%

In the data above, the confidence gap between those who have and haven’t paid for financial advice narrows progressively as people get older. The difference in confidence peaks for those under 30, with individuals in this age group being 22.00% more confident with an advisor. Meanwhile, those 60 or older are only 11.09% more confident with a professional than without.

Many reasons could explain this gap between younger and older generations, but one may be that the former feels they get more out of hiring a professional. Individuals in their 20s and 30s may lack important financial knowledge, such as how to invest properly, plan for retirement, or manage their cash flow. For this reason, the help of an advisor may provide a more substantial boost to their confidence than one of older age, with potentially much more complex challenges to face.

“Younger individuals will have more confidence in a financial plan than someone middle-aged, because they are less emotional about the results,” says Anthony DeLuca, CFP, CDFA, an expert contributor at RetireGuide.com. He adds that “an older person” may be more likely to be “jaded by the results” of meeting with a financial advisor, shaking their confidence in their plan.

What DeLuca describes appears, at least to some degree, to contribute to this progressive decline in the confidence gap as people get older. Younger clients may be more receptive to the advice they’re given, buoying their confidence level. Meanwhile, an older client who’s spent years dealing with financial challenges may not feel as sure of their plans as their younger counterparts.

Factors Affecting Confidence

Many factors can impact a person’s confidence in their financial plan, both positively and negatively. In life, money constantly has a seat at the table and, at times, can be a major stress point. For this reason, it can be easy for a person to have shaky confidence in their financial situation. On the other hand, a windfall, additional income, or professional assistance can improve one’s outlook on the future.

Major life events, such as buying a home, having children, fear of long-term care expenses, or retirement, loom large over people’s futures. And, at times, it may be unclear how a person could afford certain life events. This can negatively influence one’s confidence in their financial plan, with or without an advisor. However, the presence of an expert can help bring actionable steps, such as saving and investing a certain amount, to achieve those goals.

Similarly, as the average confidence levels above suggest, older individuals may be prone to more financial stress and less confidence than younger people. An important factor to consider is the lack of a significant time horizon to achieve goals such as retirement. As a person’s career gets closer to its end, retirement can bring fear and uncertainty. According to a 2024 study by Allianz, 63% of Americans worry more about running out of money in retirement than they do of death.

Aside from a windfall or promotion at work, DeLuca tells us that an “open mind” is crucial to having a positive perspective on your financial plan. Plans are “objective,” so it’s important not to “take it personally” when an advisor helps you, he states. Per DeLuca, “If you provide deep and honest data, you are able to produce a solid game plan to improve your future outlook.”

Value of a Financial Advisor

High-quality financial advisors can be a significantly beneficial resource for clients. After even an initial meeting with a professional, an individual may walk out with more clarity than they had before. This value manifests itself in the data above, with respondents who’ve paid for financial advice in the past being on average about 16.5% more confident than those who haven’t paid for financial advice in the past.

From personal experience working as a financial advisor, DeLuca shares his thoughts on the value of a professional:

As unbiased as possible, I’d contend that the value of a [caring] financial advisor…is invaluable. You will run into advising firms who treat their clients like numbers and put in the minimal effort. Our firm takes our job very seriously, and our care of our clients’ portfolios and plans is the pinnacle. I’ve literally seen clients’ lives change for the better at the hands of their hard work and our help.

Andrew Bellak of Stakeholders Capital, ESG specialist, Private Wealth Advisor, and a partner at Perigon Wealth explains that, “[B]ehavioral finance comes into play with…plan pricing.” For example, Bellak says that, “perceived value,” such as when “the plan seems ‘free’ or ‘included’ or bundled into some other pricing scheme, clients will tend to devalue it, and worse, be less likely to follow it.” Rather, he states that his experience is “when people pay for a plan, they value the plan more, follow it more, and therefore have more confidence in it.”

As both DeLuca and Bellak’s points illustrate, an advisor can help clients feel more confident about their financial future, especially if the professional pays close attention to their needs. A person’s confidence also hinges on their ability to keep an open mind and feel that they’re getting the most monetary value out of their advisor-client relationship.

If you feel that having an advisor would help you get on the right track, we recommend using this free matching tool. After filling out a short quiz regarding your goals and financial situation, it’ll match you with a vetted advisor that suits your needs.

Methodology

The data used in this article is based on an anonymized survey conducted by Datalign Advisory, LLC, a partner of ComparisonAdviser. Respondents are prospective clients searching for financial advisor firms in their area. In the survey, participants were asked questions regarding their age, whether they have ever paid for financial advice, and overall confidence in their financial plan, scaling from one (least confident) to five (most confident).