Financial Advice and Retirement Confidence: What's Wealth Got to Do With It?

It is widely cited in the media that households that work with a financial advisor tend to have significantly higher levels of retirement confidence (or more generally financial well-being).

For example, leveraging data from the 2025 EBRI Retirement Confidence Survey (RCS), I find that 83% of working respondents who have a financial advisor are somewhat or very confident about their retirement vs only 53% of those who do not.

This statistic masks the fact that households who work with financial advisors tend to have significantly more wealth than those who do not, and that wealth has a significant positive relationship with retirement confidence.

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Therefore, it’s not necessarily clear what the impact of financial advice is on retirement confidence when controlling for things like age and wealth.

I explore this effect in this piece, leveraging data from 2025 EBRI RCS, where I find clear evidence that retirement confidence increases the most for those with access to advice who have a lower total levels of savings (i.e., wealth).

For example, retirement confidence increases by roughly 20 percentage points for working households with less than $100,000 in wealth (controlling for age) among those who use a financial advisor, while there is effectively no change in retirement confidence for households with more than $1 million in savings.

These findings suggest that while increasing access to financial advice would likely benefit all households, those with lower levels of wealth would likely get the greatest benefit in terms of boosting retirement confidence and potentially improving long-term retirement outcomes for Americans.

Retirement confidence

Retirement is perhaps the most complex financial goal most Americans must address. There is a variety of complex decisions that must be made when it comes to preparing for retirement, such as how to invest savings, how much to save, when to retire, etc.

In theory, access to a financial advisor can help households make better retirement decisions and therefore boost retirement confidence.

One of the questions in the 2025 EBRI Retirement Confidence Survey asks: “Overall, how confident are you that you (and your spouse) will have enough money to live comfortably throughout your retirement years?”

There are four possible responses:

• Very confident
• Somewhat confident
• Not too confident
• Not at all confident

I define a respondent as being confident about retirement if she is somewhat or very confident. The analysis only includes workers between the ages of 25 and 65 who know how much they have in savings in investments (not including their primary residence).

Here’s how retirement confidence varies among respondents who note having a financial advisor and those who do not:

We can see that 83% of respondents working with a financial advisor are somewhat or very confident about their retirement vs only 53% of those not working with a financial advisor.

These types of high-level statistics are often cited in the media, intended to imply that working with a financial advisor results in a significant improvement in expected retirement outcomes.

What these statistics ignore, though, is that there are significant differences in the attributes of households that have access to a financial advisor and the extent to which this could be driving these differences.

For example, the next chart includes information about the percentage of respondents who note working with some kind of financial advisor by age and total savings:

We can see there are material differences in the probability of working with a financial advisor, especially by wealth level.

For example, the probability of a respondent working with a financial advisor with less than $25,000 in total savings is only about 20%. In contrast, if the respondent has $1 million in savings, the probability is closer to 75%.

These differences in the likelihood of having an advisor are especially important when considering how retirement confidence is related to age and total savings.

We can see that while only about 30% of respondents with total savings of less than $25,000 are confident about retirement, closer to 95% of respondents with $1 million or more are.

Combined, households with a financial advisor tend to have significantly more savings, which is significantly (positively) related to retirement confidence.

This makes the impact of a financial advisor potentially ambiguous, since it’s clear that controlling for things like age and savings (but savings in particular) is important when attempting to estimate the potential impact of a financial advisor on retirement confidence.

I did this by estimating the retirement confidence levels for the 20 different age and total savings groups considered previously for respondents who note working with a financial advisor and those who do not.

I then subtracted the retirement confidence level among those without a financial advisor from those with an advisor to determine the marginal potential impact and then estimated the average and median for each age group with each total savings level:

The impact of a financial advisor on retirement confidence clearly varies by level of total savings.

For example, respondents with a financial advisor who have less than $25,000 in savings have retirement confidence levels that are about 20 percentage points higher than those without. In contrast, there is virtually no difference among those with $1 million in savings.

Note that I wouldn’t take this to suggest financial advisors don’t or can’t benefit wealthier households, but rather that the impact is likely to be greater for those households with less wealth (i.e., those households that need more help).

While a variety of factors could be driving these differences, I believe the differences are related to how a financial advisor can help people make better decisions to improve their overall financial well-being or retirement preparedness.

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For example, a financial advisor can help people save more for retirement and make better choices about debt, etc., which can have a meaningful long-term impact on financial well-being that may not be evident from things like total savings today.

This is also not intended to suggest financial advisors cannot benefit wealthier households, rather than the relative benefit is likely to be greater among those with lower levels of wealth.

Increasing access to financial advice: The key to better retirement outcomes?

The results of this analysis imply that the potential benefits of financial advice are not likely to be the same across all households, whereby households with lower levels of savings (or wealth) would likely benefit the most.

Unfortunately, these are the households that are also the least likely to have access to a financial advisor.

Therefore, focusing on avenues to increase access to financial advice among households with lower savings is likely to be especially important to improving retirement outcomes.

I think this is where employers can offer a variety of solutions that could be priced more attractively than what might exist in a more retail setting. These could span from more digital-focused tools (e.g., retirement managed accounts) to something much more holistic (e.g., access to financial advisors).

Regardless of how we increase access to advice to American households, doing so is likely going to be a key aspect of increasing retirement outcomes for all.

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