Advisors Help Make Investors Very Happy: Study

 Commentary  December 10, 2021 at 07:44 AM  Share & Print

What You Need to Know

  • Individuals who had a financial advisor were more fulfilled, grateful, intentional and pleased with their effect on the world.

  • The study defined happiness as the feeling that reflects how well individuals’ emotional, mental, physical and relational needs are being met.

  • The amount of happiness a person achieved from having a financial advisor significantly increased once he or she accumulated $1.2 million in assets.

People who work with a financial advisor are three times happier than those who manage their own finances, according to a study released Tuesday by Herbers & Company, a business management consultancy.

The study found that individuals who had a financial advisor were more fulfilled, grateful, intentional and pleased with their effect on the world — which they cited as four predictable keys to happiness — than those who did not have a financial advisor.

In contrast, very wealthy people who did not have a financial advisor became progressively unhappier the more money they accumulated. 

The study defined happiness as the feeling that reflects how well individuals’ emotional, mental, physical and relational needs are being met and, to a smaller degree, their contentment with their idealized self versus their actual self. Money contributes to people’s ability to meet their needs and those of their families. 

Herbers & Company said its research confirms that not only are financial advisors critical to clients’ 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,” Sonya Lutter, director of institutional research and education at Herbers & Company, said in a statement.

“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 study was based on a survey of 1,000 randomly selected consumers across the U.S. who self-reported assets of $250,000 or more. Fifty-four percent of respondents were men and 46% women, and 79% were either married or living with a significant other.

To gauge the level of consumer happiness, Herbers & Company created a list of 43 statements that delved into their daily behaviors and interactions, which, it said, are good indicators of their reality and their overall satisfaction or happiness. 

How Advice Helps

According to the study, the amount of happiness a person achieved from having a financial advisor significantly increased once he or she accumulated $1.2 million in assets, and markedly decreased by four standard deviations for people without a financial advisor. 

Unhappiness rapidly declined from $1.2 through $6 million in assets for those with a financial advisor, indicating that those who have more wealth are not happier unless they have hired an 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 5% of wealth in the U.S., 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,” Lutter said. 

“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.”


European Compliance Association

European Compliance Association

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