You must have a financial advisor if you have that much money.

Money can’t buy happiness directly, but it seems that paying a financial advisor can help.

A new study has found that people with more than $1.2 million in household assets report higher levels of happiness when working with a financial advisor compared to those who do not. The finding is part of the first Herbers & Company Consumer Financial Behavior Study, which surveyed 1,000 US consumers.

A financial advisor can help you manage your assets and plan for your retirement. Find a trusted consultant today.

“As people’s assets exceed $1.2 million, those who work with financial advisors are rapidly becoming happier, while those without advisors are rapidly becoming less happy,” writes Sonia Lutter, certified financial planner (CFP) and licensed therapist, study author.

Herbers & Company is a consulting firm that specializes in helping independent financial consulting firms grow their businesses.

How happiness is measured

To quantify a respondent’s level of happiness in the survey, each consumer was presented with a list of 43 questions regarding his or her daily behaviors and interactions. The survey also identified the four pillars of happiness—satisfaction, intention, influence, and gratitude—and assessed how much respondents identify with each of them.

All survey participants have household assets of at least $250,000.

The survey found that 66% of respondents working with a financial advisor reported increased levels of all four major factors of happiness. Only 34% of people who did not have a consultant identified equally with these four principles.

The results of the study also show that those who have financial advisors are more satisfied outside of their relationship with money.

“People who have financial advisors are not only more satisfied with their finances, but also much more satisfied with their personal relationships and communication with their partners,” writes Latter, a former administrator of applied humanities at Kansas State University. “While it is possible that happy couples are more likely to hire financial advisors, it is also possible that working with a financial advisor provides couples with an opportunity to discuss financial goals and thereby increase their levels of happiness.”

Which wealthy people are the happiest?

Again, the more money a person has, the happier they are, right? Not really.

Respondents with $1.2 million in family assets reported the same level of happiness whether they work with a financial advisor or not. Those who are above this threshold and work with a counselor report significantly higher levels of happiness than those who do not have counselors.

The greatest inequality in happiness was observed among the richest respondents in the survey. Among the wealthy with assets of $6 million or more, those with a financial advisor reported the highest levels of happiness in the study. Meanwhile, those who did not have a financial advisor reported the highest level of dissatisfaction in the study, despite owning $6 million or more in assets.

“For those in the top 5% in the U.S., working with a consultant can mean the difference between being content with financial success or letting money diminish happiness,” Lutter wrote. “It looks like a financial advisor is needed to raise happiness above the $1.2 million threshold.”

Bottom line

The old axiom is true, happiness is not in money. On the other hand, a recent Herbers & Co. showed that people with the most money are happiest when they work with a financial advisor. However, those with more than $6 million in household assets but no counselor reported the highest levels of unhappiness in the study.

The survey shows that happiness levels fluctuate among people with fewer household possessions, whether they work with a counselor or not. But once people pass the $1.2 million mark, those who work with a financial advisor report much higher levels of happiness than those who work alone.

Tips for Finding a Financial Advisor

  • Finding a qualified financial advisor is not difficult. The free SmartAsset tool matches you with up to three financial advisors in your area, and you can interview your advisors for free to decide which one is right for you. If you’re ready to find a consultant to help you reach your financial goals, start now.

  • When looking for a financial advisor, it is important to do your due diligence and interview at least three possible candidates. Ask about their minimum accounts, fee structures, investment principles, and any special certifications they hold, such as the CFP designation. You will want to take all of these factors into account when choosing an advisor.

  • If you would like to get to know the advisor and/or his firm more closely, search the SEC’s Public Disclosure database of investment advisors. This tool allows members of the public to access an ADV advisor form that contains important information about their business and displays any legal or regulatory disclosures on their record.

Photo courtesy: ©iStock.com/Johnny Greig

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