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Data points to an abrupt shift in the sentiment and priorities of Americans when it comes to their personal finances since the outcome of the 2024 presidential election became clear. Demand for professional financial advice has increased, signaling a wave of financial repositioning. Both the quantity and quality of consumers seeking to adjust their financial plans have increased since the second week of November, 2024, according to data from financial technology company SmartAsset.
Several circumstances may be helping to drive this sudden increase in demand. During the last Trump presidency, there was a 2.35% annualized performance premium on the S&P 500, inflation adjusted. From Trump’s election win in November 2016 through Joe Biden’s presidential win in November 2020, the S&P 500 saw an inflation-adjusted return of 10.22% per year, compared to 7.87% annually from November 2020 onwards.
Investors may be hoping for a repeat of this performance premium in the coming four years. Promised deregulation through Elon Musk and Vivek Ramaswamy’s Department of Government Efficiency may give companies the expectation that there will be opportunities to expand business, cut costs and ultimately increase profits. Potential changes to the tax code – such as measures set out in the Tax Cuts and Jobs Act in Trump’s 2017 term that generally favored high-net-worth individuals – also may be instigating urgency among investors. Several sources point to the sudden increase in demand for professional financial services for consumers since election day.
Technically, President Joe Biden’s administration had the highest nominal annualized stock market performance since Bill Clinton was in office in the late 1990s. However, when adjusted for inflation during the same time period, the performance of the S&P 500 was actually the lowest it’s been since George W. Bush was in office through the beginning of the 2008 financial crisis.
While an individual invested solely in the S&P 500 index would have seen their returns grow by 13.33% annually since the 2020 election – including dividend reinvestments – the actual purchasing power of that growth would only have increased by 7.87% per year due to particularly high inflation during the last four years.
Investors seem to be positioning themselves based on expectations of prior market growth after the 2024 election results became clear by the morning of November 7, 2024.
Public and private indicators suggest that consumers immediately took action to pivot their financial situations given the results of the November 2024 election.
Demand for financial advisors increased abruptly starting after November 6. According to internal data from SmartAsset, a company that connects consumers with financial advisors, the quantity and urgency of individuals seeking professional financial guidance increased over pre-election metrics.
The week of November 3rd saw the third highest level of weekly demand for advisors in 2024 – and the week of November 10th saw the highest demand for financial advisors all year, with over 9,000 individuals seeking advisors through SmartAsset in just a seven-day period.
Similarly, Google searches for the term “financial advisor near me” increased after the election. The monthly average search volume increased sharply, yielding an estimated search volume of over 27,000 per month in December.
And this is a priority, as indicated by consumer responses regarding their desired timeline for these partnerships. SmartAsset’s matching tool asks people seeking financial advisors: “How quickly would you like to improve your long-term financial strategy?” with answer options of “As soon as possible”, “3 months”, “1 year”, and “No specific timeframe”. Respondents indicating “No specific timeframe” – indicating a lack of urgency for their financial plan, despite wishing to speak to advisors – dropped to a six month low of 7.7%. Respondents looking to change their financial plan “As soon as possible” breached 50% the week of November 24th.
Out of major U.S. cities, the largest statistically significant increases in demand post election occurred in New York City and Philadelphia. In the month leading up to the election, Manhattan residents made up an estimated 3.12% of all consumers searching for financial advisors, according to internal SmartAsset data. In the month following the election, that metric increased up to 3.55% of all leads. Similarly, Philadelphia residents made up 1.03% of consumer leads pre-election, and 1.35% afterwards.
Regardless of changes in demand since the election, demand for financial advisors remains strongest overall in New York City, Chicago and Atlanta.
The value of a financial advisor will vary from consumer to consumer, but evidence suggests that several factors help improve the lifetime value of an advisor-client relationship. Namely, starting at a younger age – and thereby allowing more years for compounding effects of investment gains and tax savings generally associated with professional financial guidance – will generally yield better financial results. Similarly, initiating a client-planner relationship with a higher starting net worth can yield greater benefits.
According to SmartAsset’s proprietary model measuring the value of a financial advisor, the impact of an advisor on a client’s lifetime net worth can range from an estimated 19% to 212%, depending on factors such as age, income, retirement age and other factors – even after accounting for inflation and advisor fees. Still, it’s important for clients to ensure an advisor is a good fit for their personality, goals and circumstances, as a successful advisor-client relationship hinges not only on professional expertise but two-way, open communication.
Overall, the data suggests that the landscape looks promising for the financial advisor industry, with more Americans looking to capitalize on administrative changes for their own personal benefit. Similarly, historical trends indicate that consumers may have ample opportunity to improve their financial standing over the next four years.
If you’re interested in connecting with a financial advisor, you can use this free tool to get matched.
If you’re a financial advisor looking to grow your business, connect with SmartAsset today.
Bureau of Labor Statistics, CPI Inflation Calculator.
Of Dollars & Data. S&P 500 Historical Return Calculator [With Dividends]
SmartAsset. The Value of a Financial Advisor: What’s It Really Worth?
The article and opinions in this publication are for general information only and are not intended to provide specific advice or recommendations for any individual. SmartAsset.com is not intended to provide legal advice, tax advice, accounting advice or financial advice (Other than referring users to third party advisers registered or chartered as fiduciaries (“Adviser(s)”) with a regulatory body in the United States). We suggest that you consult your accountant, tax, or legal advisor with regard to your individual situation.
This is not an offer to buy or sell any security or interest. All investing involves risk, including loss of principal. Working with an adviser may come with potential downsides such as payment of fees (which will reduce returns). Past performance is not a guarantee of future results. There are no guarantees that working with an adviser will yield positive returns. The existence of a fiduciary duty does not prevent the rise of potential conflicts of interest.
SmartAsset Advisors, LLC (“SmartAsset”), a wholly owned subsidiary of Financial Insight Technology, is registered with the U.S. Securities and Exchange Commission as an investment adviser. SmartAsset’s services are limited to referring users to third party advisers registered or chartered as fiduciaries (“Adviser(s)”) with a regulatory body in the United States that have elected to participate in our matching platform based on information gathered from users through our online questionnaire. SmartAsset receives compensation from Advisers for our services. SmartAsset does not review the ongoing performance of any Adviser, participate in the management of any user’s account by an Adviser or provide advice regarding specific investments.
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