There are not many questions advisors can ask investors that are more revealing from an investment standpoint than “What do you do for a living?”
There are few answers to that question more responsible for the way an investor invests than when they say they are in the field of education.
From an occupational standpoint, educators have continued to move up in the ranks of affluent investors. Educators are among the top five occupations for all investors, from those with a net worth of $100,000 (not including primary residence) to those with a net worth of $25 million.
Especially at the K-12 level, educators are viewed as some of the hardest-working white collar Americans. In most areas of the country, they are well-rewarded for their efforts, sometimes in salary and sometimes with pensions. Today, many educators are reaching retirement age with a significant level of wealth, and they also reach that stage in life with distinct opinions regarding their investment plans and retirement concerns. This would make educators an attractive audience for financial advisors who understand the pressures that exist for educators.
Because of the growing population of educators among the affluent population in America, Spectrem released a new study on that segment of wealthy investors. Get Schooled on Educators examines the responses of teachers, professionals and education administrators to a year’s worth of research to create a complete understanding of how educators think when they are considering their own portfolio of investments.
Today’s educators face a new external pressure that could affect investment decisions, and could require them to go in search of a financial advisor. State and federal governments argue the public school-private school matter consistently, and it has been ramped up in recent months with the push from Secretary of Education Betsy DeVoes’ promotion of private and charter schools.
If the field of education is in a state of flux, so too are the educators in that field, and questions about their financial future could create a need for professional financial advice among those investors from the educational field who don’t already have an advisor.
Now here is some good news for advisors considering a push to attract educators as clients: In general, investors from the field of education are less likely to have negative attitudes towards advisors than investors from other fields. According to the research in Get Schooled on Educators, only 41 percent of educators believe financial advisors are more concerned with selling products than with helping their client. That is an unfortunately high percentage, but not nearly as high as the average among all investors, which is at 47 percent.
Educators also tend to be less critical of advisors; only 46 percent judge an advisor based on how they perform relative to the stock market, while 51 percent of all investors make that judgement.
While those insights are true, there are other insights that characterize how educators feel about advisor services and they are not as optimistic. Educators who do not use advisors are more likely than other investors to believe they do not have the assets necessary to hire an advisor, or believe they cannot afford one.
These are obviously areas that advisors can address in marketing specifically to educators if the opportunity presents itself.
The Spectrem study also points out educators have a lower tolerance for investment risk and are less likely to consider themselves knowledgeable about financial products and services. But, because they are educators, they are willing to learn.
It is up to advisors to educate the educators on the opportunities they have to increase their assets and expand their investment portfolio.