“Double Your Retirement Wealth: The Surprisingly Simple Strategy Endorsed by Schwab Experts”
**Schwab Study Shows the Power of Financial Advice**
According to research, most self-directed retirement savers are not protecting their hard-earned money the right way. In fact, investors who hire a financial advisor save nearly twice as much for retirement as those who don’t. A recent study by Charles Schwab found that in the first quarter of 2022, the average balance among plan participants working with a financial advisor was $535,354, nearly double the $286,008 held by non-advised participants.
The study also found that baby boomers (ages 58 to 75) hold the largest balances of all Preferred Choice Retirement Accounts (PCRAs), averaging $520,616. Gen X participants aged 42-57 hold an average of $299,520, while Millennials aged 30-41 hold an average of $102,113.
Only 19.2% of total PCRA participants choose to work with a financial advisor, but about half of those advisor accounts belong to Generation X. Baby boomers account for 32.5% of suggested accounts, and Millennials account for 14.9%.
Working with a financial advisor meant there were more deals last quarter than without an advisor, with an average of 19.7 deals compared to 12.3 deals without an advisor. Additionally, advised participants’ asset allocation was more diversified, with a lower percentage of cash and a higher percentage of mutual funds.
**FAQ**
Q: What is the average balance of plan participants working with a financial advisor?
A: The average balance is $535,354.
Q: What is the average balance of non-advised participants?
A: The average balance is $286,008.
Q: Which age group holds the largest balances of all PCRAs?
A: Baby boomers (ages 58 to 75) hold the largest balances, averaging $520,616.
Q: Why are advised participants more likely to have diversified asset allocation?
A: Advised participants are more likely to have diversified asset allocation because they are working with a financial advisor who can help them develop a personalized investment strategy.
Q: Why are advised participants less likely to hold a high percentage of cash?
A: Advised participants are less likely to hold a high percentage of cash because they are working with a financial advisor who can help them develop a long-term investment strategy that is tailored to their individual goals and risk tolerance.
**Conclusion**
Retirement plan participants who work with a financial advisor can nearly double their retirement savings, new data from Charles Schwab shows. Financial advisors appear to be favoring more diversified strategies that reduce exposure to their personal assets, thereby reducing risk in this volatile market. While unadvised participants appeared to select similar stocks and funds to invest in, targeted financial advice may have improved portfolio results.
