A lot changed during the years that I was in the financial services business.  At the beginning of the eighties, when I sat down with a young teacher and started talking about retirement saving, it was a tough sale.  These young teachers were thinking about money for the coming weekend or a new car or a new stereo.  Saving for something that was forty years off was not thought of as a priority. That may be an understatement.

Saving and goal-setting

Fast forward a dozen years.  The same young teachers in the early nineties had heard a steady drumbeat of pundits talking about the jeopardy that social security faced.  They heard a barrage of consumer education information about saving for retirement. 

When I ventured back out into the field and sat down with teachers again in the first part of the nineties, their attitude and mindset had changed dramatically. Instead of reluctantly throwing a few dollars every pay date into a tax-deferred savings vehicle, these young teachers wanted to invest as much as they could afford to make sure they were ready for retirement.  What a difference a decade makes.

It should come as no surprise then that the baby-boom generation and generation-X take financial advisors very seriously. The wealth management, financial planning and asset management services provided by advisors are seen as a necessity and no different than regular visits to the dentist. Evidence of this paradigm shift in public perception is the current savings rate. It is nearly three times higher today than two years ago. (yes, a recession and the accompanying fear can change the American psyche)

Fee-based has caught on

Even before the shake-up on Wall Street, there were brokers and clients moving away from full-service brokerage firms and towards registered investment advisors in small to medium-size firms.  The other lesson the public has learned is the value of no-bias investment advice.  Fee-based advisors work within a model that is now appreciated and understood by the public. 

The transactional nature of big brokerage firms has been the topic of another education campaign that has changed public perception.  Although a large percentage of brokers ‘annuitized’ their own books of business many years ago, the average baby-boomer and gen-Xer has found a level of comfort with the fee-based approach.

An educated public will ensure a rosy future for those who work within the fee-based advisor community. This positive perception will be handed down to generation-Y and the Millennial generation. Splurging on the weekend or buying a new Blu-Ray player will take a backseat to sitting down with a good advisor. Times have changed.