Morgan Stanley Wealth Management has released findings from a recent study, emphasizing the importance of financial planning in enhancing confidence and satisfaction among investors. The research surveyed over 1,000 affluent individuals aged 25 to 75 to understand how financial planning impacts their lives.
The study revealed that having a financial plan is associated with improved mental wellbeing. Investors with a plan reported greater confidence and satisfaction, with fewer concerns about saving enough for the future. These individuals also rated their investment value and financial health higher by approximately 10%. Moreover, they were more likely to describe their financial outlook as "prepared" and "hopeful," while also reporting better life direction and relationship satisfaction.
Despite these benefits, there is a significant gap between ideal and actual behaviors in starting financial planning early. While 76% of those with formal plans wished they had started earlier in their careers, only 28% did so. Many delayed until the need for retirement savings became apparent.
A notable finding was the confidence gap regarding retirement savings knowledge. Although 53% of working individuals felt confident about saving for retirement, only 36% were confident in knowing how to do it effectively—a disparity of 17 percentage points. Additionally, many investors lacked confidence in achieving long-term goals, particularly women (68%) and younger generations (70% Millennials, 72% Gen Z).
The study highlighted perceived barriers to initiating financial plans despite widespread recognition of its importance—97% acknowledged its significance yet only 53% had an active plan. High costs (53%), belief in self-sufficiency (44%), or lack of assets (38%) were common obstacles cited by respondents.
Professional advisors play a crucial role in overcoming these barriers; most respondents (74%) valued professional guidance during the planning process. Those who worked with advisors showed increased engagement: 51% met regularly compared to just 25% without plans; similarly reviewing advisor communications was higher at 37%.
Anthea Tjuanakis Cox from Morgan Stanley noted: “Financial planning matters at every stage of life and level of wealth... It’s never too late to start.” She emphasized that early consistent planning leads to better choices creating opportunities for growth over time.
Morgan Stanley's customizable approach tailors plans according to client needs considering factors like time horizons risk tolerance asset makeup among others providing comprehensive solutions aligning individual circumstances goals aspirations ensuring accessibility across diverse demographics ultimately contributing towards holistic investor success wellbeing long-term security amidst ever-changing market dynamics uncertainties challenges ahead.