The Informed Investor

The Average Investor is Woefully Unprepared

It’s an all-too-familiar story for financial advisors. A potential client comes in for an initial meeting, they share a few aspects of their financial situation, and then they ask some variation of the same question: “When can I retire?”

Some potential clients take the question a step further and ask, “Can I retire by next year?” or even, “Can I retire by the end of the year?”

Many people expect a straightforward answer to these complicated questions. But the truth is, a retirement plan is multi-faceted and takes a good deal of planning and consideration. You might be able to take a 5-minute test on the internet that tells you when you can retire, but there’s no way a generic test can make a comprehensive assessment of your highly individualized life situation. We all have unique goals, different assets, and differing life circumstances, and sometimes it takes a good deal of digging by an experienced financial advisor to piece together a full picture of an investor’s situation and begin developing a plan.

Not to mention, a person’s financial situation tends to become more and more complicated as they age. A young adult in their early twenties has far different considerations than someone in their fifties who has worked in five companies, has chronic health issues, owns two homes, and has kids in college. The twenty-something likely doesn’t need a financial advisor to help them invest their first $10,000. With a little research, they can do it on their own. But the fifty-something with a laundry list of considerations could certainly benefit from some professional financial guidance.

However, many people resist reaching out to a financial advisor until they’ve reached a breaking point. Often, they take a fairly hands-off approach to investing and get by with the basics. They toss some money into the 401(k) and set aside cash in an emergency savings account, until their circumstances change. They may inherit some money. Something may happen to their spouse, or their marriage may dissolve. Or they may come to terms with the fact that they’re aging and need to think about their next steps.

Whatever the case, we tend to be a nation of procrastinators. 

The Great American Delay

As a society, Americans tend to put off serious investing until they’re older. Half of adults aged 18 to 34 are not saving for retirement at all. And when we do begin to take retirement planning seriously, many of us vastly underestimate how much is needed to retire comfortably.[1][2] Failing to plan can lead to a lot of uncomfortable and ultimately disappointing conversations with financial advisors. If planning doesn’t begin early on or isn’t taken too seriously, the client will likely have some catching up regarding retirement prep.

In many ways, putting off retirement planning is like ignoring a physical condition that will probably eventually require medical attention. You might be able to ignore that pain in your side for a while—and you might even treat it yourself with home remedies or over-the-counter medications—but if it keeps building and building (just as your personal financial situation grows increasingly complicated), the best course of action is to seek help from a professional.

Yet too many Americans delay serious financial planning until they’re feeling panicked (or their appendix bursts, to continue the medical analogy!). As of 2020, half of all Americans were struggling with retirement finances.[3]

Why are so many investors woefully unprepared? 

Investing Obstacles

When it comes to Americans’ general lack of financial preparedness, various factors are likely at play. 

For one, we (as Americans) have a very DIY approach to life, which carries over to investing. We tough out the pain in our side. We look up our symptoms and possible cures on Web MD. When we’re finally in unbearable pain, we make an appointment to see a doctor. 

If we’re past the point of “DIY-ing” wealth management, we might seek help from a friend or acquaintance—any friend or acquaintance. Too often, I have heard stories of people turning to their daughter’s soccer coach or golfing buddy to help with some part of their investment strategy—just because that person claimed to have investment knowledge and happened to be a built-in acquaintance. This approach could be dangerous and lead to a lot of heartache and frustrations. An informed investor 1) knows when DIY-ing is no longer the best course of action and 2) does their due diligence to find a reliable financial advisor.

Another reason Americans delay investing/retirement planning is because of a general lack of knowledge or feeling overwhelmed or intimidated by the process. According to a Goldman Sachs survey, 35 percent of American investors find investing overwhelming, the majority of whom “struggle when deciding how and/or where to invest.” [4]

Additionally, financial illiteracy is far too common. Most people do not learn about personal finance in school beyond what they might pick up from an Economics 101 class. Thus, the average investor is likely self-educated or has received a financial “education” from questionable sources.[5] Many people are told to contribute to a 401(k) or “invest in the stock market,” but they do not necessarily grasp how these individual financial actions fit into a larger, comprehensive financial strategy. 

A third reason Americans might delay turning to a financial advisor for support is that they are wary of advisors and do not necessarily trust them to act in their best interest.[6]

Even though some financial advisors, unfortunately, do not always act in the client’s best interest, plenty of advisors do. As a savvy consumer, it is wise to do your due diligence and seek an advisor who is committed to upholding their fiduciary duty and who, preferably, works for a fee-only advising firm. 

Financial Advisors Can Help

Just as you would see a doctor when you're dealing with an increasingly painful medical ailment, so should you enlist a financial advisor's help when your financial situation grows more complicated. Don’t delay the decision! The earlier you seek financial guidance, the more freedom and flexibility you'll have when defining your financial strategy.

But why seek guidance from a financial advisor in the first place? What sets qualified advisors apart from internet articles, hobby investors, the news media, or your Uncle Joe?  

Quite a lot.

For one, qualified financial advisors have a wide variety of tools and the training required to use those tools. Just as a doctor might have an X-ray or MRI machine at their disposal (and know when and how to use them), financial advisors also have analytical tools to aid in financial planning.

When creating a personalized financial strategy, advisors can consider dozens of factors. How many children does the client have, and will any of them be attending college? Do they have a lake home they’re planning to sell? Do they have a chronic health condition that significantly adds to annual expenses? Did they win the lottery? Do they enjoy taking lavish vacations? Asking these types of questions is like conducting a thorough medical examination. The doctor needs to understand the full range of the patient’s symptoms to make an accurate diagnosis.

Another reason to turn to a financial advisor for guidance is a history of life experience. Any experienced advisor will have dealt with various clients and financial situations. We’ve seen many circumstances and have had to navigate many tricky cases. Because of this depth of experience, we may suggest an investing approach or propose a solution to a financial query you may not have considered. Sometimes, it’s difficult to ask hyper-specific investing questions online, but financial advisors field these types of questions all the time and can usually come up with a satisfactory solution. 

Lastly, when you call upon a financial advisor who upholds a fiduciary standard of care, this is like seeing a doctor who adheres to the Hippocratic Oath. To put it simply, the client and their interests come first. By upholding a fiduciary standard of care, a financial advisor is duty-bound to treat their clients with the same fastidiousness and care they would treat their family members. When searching for financial guidance, be sure to seek out advisors committed to this highest level of financial integrity.


1. Adamczyk, A. (September 4, 2019). This is when people start saving for retirement—and when they actually should. CNBC Make It.

2. Childs, M. (April 29, 2019). Americans know they’re not ready for retirement. But it’s worse than they think. Barron's.

3. Tepper, T. (October 6, 2020). Studies confirm that half of Americans struggle with retirement. Forbes.

4. Survey results: How are Americans investing today? (September 13, 2021). Marcus: By Goldman Sachs.

5. Hidden costs of free advice. (February 8, 2022). AdvisorSmart.

6. Do you trust your financial advisor? (January 25, 2022). AdvisorSmart.



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