Study: High Levels of Stress Impacting Financial Advisors and Investors Personally and Professionally

New research from the Financial Planning Association, Janus Henderson Investors and Investopedia explores the issue of stress among financial advisors and investors, its causes and what can be done

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Financial Planning Association

May 08, 2019, 09:00 ET

DENVER, May 8, 2019 /PRNewswire/ -- A study released today by the Financial Planning Association® (FPA®), Janus Henderson Investors and Investopedia reveals that 71% of financial advisors and 57% of investors are currently experiencing an increase in moderate to high levels of negative stress compared to 12 months prior.

The study examined both financial advisor and investors' top personal and professional stressors, and results indicate that while investors' primary concerns center on how to maintain lifetime income that meets expenses, they're not confident in their own financial knowledge, leading to financial insecurity and increased stress levels. Financial advisors' top stressors included maintaining profitability and growth, as well as meeting business goals. The research also showed financial advisors can play a key role in helping reduce investors' stress through financial plans, goal setting and reviewing investors' other top concerns— keeping their personal data safe (72%), healthcare (66%) and maintaining assets (66%).

Key findings from The War on Stress 2019 report include:

71% of financial advisors and 57% of investors are currently experiencing an increase in moderate to high levels of negative stress compared to 12 months prior.
Respondents cited the biggest impacts of stress include their mood (50% for investors and 61% for advisors), personal relationships (38% for investors and 56% for advisors) and health (38% for investors and 54% for advisors).
There is a significant connection between stress and feelings of financial insecurity. Among low-stress investors, 77% feel financially secure―a number that drops to only 39% among respondents who feel high stress.
Three-quarters of investors with a written financial plan say they feel somewhat or very financially secure, while only 51% of those without a written financial plan say the same.

"Stress is a factor that will never be completely eradicated from our lives, but we certainly can and should take the necessary steps to cope with it personally and professionally," says 2019 FPA President Evelyn Zohlen, CFP®. "As a financial advisor who operates a financial planning practice, I personally cope with stress and the impact it has on me and my business, but I also see the impact stress has on my clients―especially stress caused by financial concerns. This research highlights the importance of our work as advisors as we help our clients address that stress while also taking the necessary steps to overcome stress in our personal lives."

The Impact of Stress is Significant

Respondents reported that stress most negatively impacts their mood (50% for investors and 61% for financial advisors), personal relationships (38% for investors and 56% for financial advisors) and health (38% for investors and 54% for financial advisors).

"Chronic stress impacts risk-based decision-making—impairing complex, flexible reasoning, and pushing us toward more rigid and habit-based actions," says Joetta Gobell, Ph.D., Vice President of Research and Insights at Dotdash, Investopedia's parent company. "For both financial advisors and investors, this kind of cognitive impact can potentially lead to sub-optimal decisions around investing that unfortunately only further compound or extend the stress."

When it comes to the financial stress investors feel, it's clear that financial advisors can play a key role in helping reduce that stress. Three-quarters of investors with a written financial plan say they feel somewhat or very financially secure.

"Stress manifests itself in many ways for investors, especially when it comes to feeling unprepared for key life stages like retirement and family planning," said Caleb Silver, Editor in Chief of Investopedia. "Stressed investors are more likely to make irrational decisions that are not in tune with their financial goals."

Stress is Impacting Goal Achievement for Financial Advisors

Among financial advisors who set clear personal and professional goals, those reporting lower stress levels were much more likely to have achieved or exceeded those goals. For advisors struggling to meet their goals, poor time management (35%), mindset (33%) and ineffective use of technology (27%) are the main culprits.

When exploring primary causes of stress for financial advisors, the data reveals that 65% of advisors feel maintaining proper work/life balance is either somewhat or very stressful. 56% also say building a business and 53% say meeting client expectations are the other two top areas causing the most stress.

"Every day in our work with advisors we see how stress permeates their personal and professional lives. We have found that increased stress is getting in the way of advisors doing what they do best – taking care of their clients," says Michael Futterman, Head of Janus Henderson Knowledge Labs Professional Development. "At Janus Henderson, we are deeply committed to addressing the issue of rising stress for both advisors and their clients by delivering cutting edge programs to help illuminate habits and practices that will make a difference in the way they conceive of, manage and ultimately benefit from stress."

The War on Stress 2019 is now available and additional tools and resources to help financial advisers cope with stress are available from Janus Henderson Investors.

Survey Methodology

The research was conducted through an online quantitative study of N=649 respondents (336 investors and 313 financial advisors) between December 2018 and January 2019 by Julie Littlechild of AbsoluteEngagement.com.

About the Financial Planning Association
The Financial Planning Association® (FPA®) is the principal membership organization for CERTIFIED FINANCIAL PLANNER^TM professionals, educators, financial services professionals and students who are committed to elevating the profession that transforms lives through the power of financial planning. Through a collaborative effort to provide members with tools and resources for professional education, business support, advocacy and community, FPA is the indispensable resource in the advancement of today's CFP® professional. Learn more about FPA at OneFPA.org and follow on Twitter at twitter.com/fpassociation.

About Janus Henderson Investors
Janus Henderson Group (JHG) is a leading global active asset manager dedicated to helping investors achieve long-term financial goals through a broad range of investment solutions, including equities, fixed income, quantitative equities, multi-asset and alternative asset class strategies.

Janus Henderson has approximately US$357 billion in assets under management (at 31 March 2019), more than 2,000 employees, and offices in 28 cities worldwide. Headquartered in London, the company is listed on the New York Stock Exchange (NYSE) and the Australian Securities Exchange (ASX).

Learn more about Janus Henderson Investors at janushenderson.com.

About Investopedia
Investopedia helps its more than 12 million monthly U.S. users (comScore Media Metrix March 2019) learn how to understand complex financial concepts, improve their investing skills, and learn how to manage their money. Whether in a classroom, a boardroom or a living room, Investopedia editors and its network of financial advisors and experts have answered questions and earned readers' trust since 1999. Investopedia is part of the Dotdash family of brands.

SOURCE Financial Planning Association