57% of Consumers Received Financial Advice in 2023

Rising inflation and stagnant incomes are forcing many Americans to reconsider their financial stability, prompting a surge in demand for personal finance advice. Economic headwinds are leaving people worried about their financial future, leading more individuals to seek planning support.

The PYMNTS Intelligence report, “Navigating Financial Uncertainty: Whose Advice Do Americans Trust?,” in collaboration with NCR Voyix, reveals nearly two-thirds of consumers now live paycheck to paycheck. Among them, 72% claim that their income has not kept up with inflation.

As a result, 57% of Americans sought personal finance advice in 2023, and nearly three-quarters of those who have never received financial planning advice are now open to the idea, with more than half planning to seek advice in the next three years.

Consumers Turn to Friends, Social Media and AI for Financial Advice

While traditional sources like financial institutions (FIs) remain prevalent, new channels have gained traction, especially among younger generations. Consumers are seeking advice from various sources, including friends, family, social media and artificial intelligence (AI) tools.

Last year, 47% of people who sought financial advice turned to their personal networks, with numbers higher among Generation Z (58%) and millennials (55%). Social media also plays a role, with 42% of Americans consulting platforms for financial insights, though many remain skeptical. In contrast to professional advice, two-thirds of respondents said social media has made no impact on their financial lives.

AI is a presence in the financial advice landscape, with 37% of Americans using it for guidance, a figure that rises to 61% among Gen Z. Among those PYMNTS surveyed, 31% of investors are comfortable using AI-driven financial advice without double-checking it elsewhere. While AI is gaining in popularity, it’s clear consumers prefer more established channels for major financial decisions.

Traditional FIs Remain Trusted Experts

Despite the influence of newer technologies, traditional FIs continue to be the most trusted source of financial advice. The gap between the trust placed in FIs and other sources, like social networks or AI, is significant across all generations.

For instance, 70% of baby boomers trust banks more than family or friends for financial advice. Gen Z also shows a slight preference for FIs over personal networks, with trust ratings of 72% for banks compared to 71.6% for friends and family. When faced with a financial windfall, 61% of Americans would consult a financial adviser.

To meet accelerating demand, FIs are focusing on offering more personalized financial advice. Satisfaction levels for personalized advice are 195 points higher on a 1,000-point scale than for generic offerings. As the market for financial planning expands, FIs that deliver customized solutions will likely retain and attract more customers.

Personalized Financial Advice: A Key Differentiator for FIs

As economic uncertainty continues, there is an opportunity for FIs to impact customer relationships by providing personalized financial planning. Many consumers, especially those who have never received professional advice, are seeking assistance.

FIs can stand out by using AI-driven tools to offer personalized financial strategies and address specific needs. Highlighting their expertise can also reinforce their trustworthiness, which is a critical factor in attracting new clients. As the demand for personalized financial advice increases, FIs are well-positioned to strengthen client loyalty and capture new business by integrating expert knowledge with new technology.