Changes in Household Net Financial Assets After the Great Recession: Did Financial Planners Make a Difference?

TL;DR

This study investigates how using financial planners affected household net financial assets during the Great Recession, finding that engaging with planners helped preserve and grow assets during economic downturns.

Contribution

It provides empirical evidence that financial planner use during a recession positively influences household asset preservation and growth, highlighting the importance of financial advising in downturns.

Findings

Financial planner use during the recession helped preserve assets.

Curtailing financial planner use negatively impacted asset preservation.

Engaging financial planners during downturns offers significant benefits.

Abstract

This study utilized the 2007-2009 Survey of Consumer Finances (SCF) panel dataset to examine the impact of financial planner use on household net financial asset level during the Great recession. Data included 3,862 respondents who completed the SCF survey and a follow up interview. The results indicated that starting to use a financial planner during the Great Recession had a positive impact on preserving and increasing the value of households' net financial assets, while curtailing the use of a financial planner during this time had a negative impact on preserving the value of households' financial assets. Thus, study findings indicated that the benefit of using a financial planner maybe particularly high during a major financial downturn.