According to a new study from financial services firm Edward Jones and Morning Consult, Americans are at crossroads with how they view the current state of the U.S. economy. While 45% are optimistic in the direction the U.S. economy is headed, nearly as many Americans are pessimistic (42%). Top concerns about the economy include the rate of inflation (83%), supply chain disruptions (77%), employment rate (71%), and interest rates (71%).

The survey also revealed a correlation between concern and action. The more concerned adults are with economic conditions, the larger the impact those concerns have on their financial decisions. In fact, two in five U.S. adults (41%) participating in the survey have considered the rate of inflation when making financial decisions in the last nine months.

"Americans have certainly been faced with disruptive conditions over the past year – including economic uncertainty from the pandemic, rising inflation and now a potentially rising interest rate environment," said Mona Mahajan, senior investment strategist at Edward Jones. "While we may see increased levels of market volatility in this backdrop, we believe economic fundamentals remain solid; it's important to not let fear, anxiety, or even excitement about markets derail long-term goals and thoughtfully considered financial strategies."

Economic Environment Drives Emotional Investing

Despite the ongoing economic uncertainty from the pandemic, a majority of consumers (79%) have made carefully-planned financial decisions over the past nine months. Yet, still, one in five Americans (21%) admit to primarily making emotional decisions when it comes to their personal finances. This figure is even higher for Gen Z investors, more than one-third (37%) indicated they have primarily made financial decisions based on emotion.

When asked what factors they consider when making financial decisions, 30% of survey respondents say careful financial planning, 23% seek advice from friends and family, 23% watch the market, and 22% seek advice from a financial advisor. And for those who consult a financial advisor, the majority (79%) work with one on a regular basis – emphasizing the importance of having a financial advisor help stay on track to meet goals.

"When people become worried about their finances, their natural desire is to want to do something – anything - to make that worry go away. Unfortunately, people often make changes to their portfolios that are not in their best interest just to satisfy that need to do something," added Laurel Newman, behavioral scientist at Edward Jones. "Investors do not need to make financial decisions in a vacuum, however. A financial advisor can help investors determine when it's best to act (and how), vs. when it's best to sit tight and ride things out."

Expectations of Financial Advisors Evolve

Americans' needs from their financial advisors are changing as well. More than half of Americans working with financial advisors (54%) indicate that a variety of factors including COVID-19, interest rates, and unemployment rate have changed their expectations of their financial advisor. This figure is even higher for Millennials who work with financial advisors (75%).

Trusted financial advisors can play a key role in building financial knowledge and confidence – two important pieces of building financial resilience. Not only did the survey find that working with a financial advisor can help individuals feel less stress (25%) and frustration (16%), but also easing anxiety (72%) and concern (61%) around financial decisions.

Methodology
This survey was conducted by global data intelligence company Morning Consult among a national sample of 2,200 adults from January 7 – January 10, 2022.