D.A. Davidson Survey Finds Connection Between Setting Financial New Year’s Resolutions and Achieving Financial Goals

Working with a financial advisor improves understanding of inflation, likelihood to consider refinancing debt

D.A. Davidson & Co. today announced survey results revealing that two-thirds (67%) of individuals with debt are not planning to refinance or consolidate their debt in the next year, possibly missing an important financial savings opportunity amidst the current economic and interest rate environment. That said, working with a financial advisor can help – as 50% of those with debt who work with a financial advisor are making this consideration. Additionally, individuals who work with a financial advisor are more likely to say they fully understand the impact of rising rates and inflation on their personal finances compared to those who do not (85% vs. 67%).

“With markets off to a choppy start in 2022 and rate hikes on the horizon, inflation is top of mind for many investors,” said Andrew Crowell, Vice Chairman of Wealth Management at D.A. Davidson. “Especially in this inflationary environment, working with a financial advisor and making financial resolutions at the beginning of the year, or really at any new chapter, can be critical to achieving your financial goals.”

Some Groups Better Positioned to Understand Inflation

While most people (72%) feel they fully understand the impact that rising rates and inflation can have on their personal finances, significantly more males report fully understanding the impact than females (77% vs. 67%).

The percentage of individuals who feel they fully understand the impact of rising rates and inflation on personal finances increases with age: Baby Boomers (79%), Gen X (70%), Millennials (69%), Gen Z (62%). Perhaps it’s because of this increased understanding, that Baby Boomers are most concerned with paying off debt in 2022, while younger generations’ biggest priority is saving for the future. In a similar vein, older generations are more concerned with budgeting amid rising inflation in 2022 compared to their younger counterparts: Baby Boomers (19%), Gen X (12%), Millennials (7%), Gen Z (5%).

Making New Year’s Financial Resolutions Key to Achieving Financial Goals

More than half (51%) of respondents did not have or create a written financial plan in 2021. Of those who did, however, younger generations were more likely to have a written financial plan than older generations: Gen Z (67%), Millennials (59%), Gen X (43%), Baby Boomers (37%). Consequently, Gen Z and Millennials were more likely to have achieved all or some of their financial goals last year compared to Baby Boomers (58% vs. 50% vs. 34%). Following the same pattern, half of Millennials made a New Year’s resolution related to their finances this year, followed by Gen Z (43%) and Gen X (33%), with only 18% Baby Boomers doing the same.

Males were significantly more likely to make a financial resolution for 2022 than females (39% vs. 29%) and were also significantly more likely to report achieving some or all of their financial goals in 2021 (49% vs. 37%).

Those who work with a financial advisor were significantly more likely to make a financial New Year’s resolution than those who do not (45% vs. 30%), and over three-quarters (76%) of people who work with a financial advisor said they achieved all or some of their financial goals for 2021 compared to a third (31%) of people who did not work with a financial advisor.

Half of Younger Generations (Gen Z + Millennials) May Begin Working with a Financial Advisor This Year

While three-quarters of respondents do not currently work with a financial advisor, one-third are considering starting to work with one in 2022. Currently, Baby Boomers are most likely to be working with financial advisors (31%) followed by Gen Z (24%), Millennials (22%) and Gen X (22%). Nearly half (49%) of Millennials who do not currently work with a financial advisor are planning or considering starting to work with one this year. This is the highest percentage across generations: Gen Z (51%), Gen X (40%), Baby Boomer (23%).

Significantly more males are considering or planning to start working with a financial advisor in 2022 than females (45% vs. 33%). Among those who currently work with a financial advisor, there were some differences in their financial priorities for 2022 compared to those who do not:

Methodology

This Xcelerant Survey was conducted online by Directions Research. The survey was fielded from January 13-14, 2022, among a demographically balanced nationally representative sample of 1,041 U.S. adults 18 years of age and older.

About D.A. Davidson Companies

D.A. Davidson Companies is an employee-owned financial services firm offering a range of financial services and advice to individuals, corporations, institutions and municipalities nationwide. Founded in 1935 with corporate headquarters in Great Falls, Montana, and regional headquarters in Denver, Los Angeles, New York, Omaha and Seattle, the company has approximately 1,475 employees and offices in 28 states.

Subsidiaries include: D.A. Davidson & Co., a full-service investment firm providing wealth management, investment banking, equity and fixed income capital markets services, and advice; Davidson Investment Advisors, a professional asset management firm; D.A. Davidson Trust Company, a trust and wealth management company; and Davidson Fixed Income Management, a registered investment adviser providing fixed income portfolio and advisory services.

For information, visit dadavidson.com.

Disclaimer

The information in this communication has been obtained from sources we believe to be reliable, but we cannot guarantee its/their accuracy or completeness. Neither the information nor any opinion in the publication constitutes a solicitation or offer by D.A. Davidson or its affiliates to buy or sell any securities, options, or other financial instruments or provide any investment advice or service.

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