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The primary difference between science and journalism is how we portray reality - the usual versus the unique. As the cliche goes, dog bites man happens every day, but when "man bites dog" - now there's something for the six o'clock news. The September 2001 issue of Bloomberg Personal Finance includes a substantial story about the demand for financial planners.1 After noting that "whether you earn $50,000 a year or $500,000 there's already at least one financial planner in your life: you," the article portrays recent trends in the demand for professional financial planning advice as follows:
If you think that it's time to enlist the help of a professional in these [financial] decisions, you're not alone.... The financial planning business is booming - the National Association of Personal Financial Advisors got more than 27,000 calls for assistance last year, a 35 percent increase over 1999 - and a survey of certified financial planners shows that, far from being limited to the very wealthy, the median client has an income of $75,000.
On the other hand, as discussed in the March 2001 issue of this journal ("Money, Health, and Aging Consumers: Ongoing Challenges and New Opportunities for Retirement Planning"), the majority of Americans have never discussed retirement planning with a professional financial adviser. This is not a question of "Do people use financial professionals or not?" In social science research such simple yes/no questions seldom offer very interesting explanations, so we ask the more informative contingent question of "under what circumstances" do people engage in various kinds of behavior. For this installment of Financial Gerontology, consequently, we take a closer look at "who uses a financial planner, and why not?" with the aim not of simply describing the past but of understanding how financial professionals can better reach and serve consumers.
As part of its focus on financial and health aspects of aging and retirement, the American Perceptions of Aging in the 21st Century (APA21) project conducted in January 2000 asked people of all ages and income levels if they had ever discussed retirement planning with a financial professional, and if not then why not.2 For the national sample as a whole 37 percent said "yes" and 63 percent said "no."3 Not surprisingly, annual...