Advisor clients score 77 on Northwestern Mutual prosperity index

Households working with a financial advisor scored 77 on Northwestern Mutual's Personal Prosperity Index at year-end, nine points above the 68 scored by those without an advisor. The index itself rose three points to 71 out of 100 from 68 at mid-year, according to the survey of 2,000 U.S. adults that The Harris Poll conducted from Aug. 25 to Sept. 3.

Clients with the fullest financial picture, including an advisor, a written plan, insurance and an investment portfolio, scored 79, 11 points above respondents with no professional guidance. The advisor advantage held among households with less than $1 million in investable assets, where it was 10 points. At mid-year the same index put advisor households at 74 and those without an advisor at 66; InvestmentNews, which reported the year-end figures, said the data suggest that differential has since widened.

For advisors, 10 points is a sourced number for what planning adds to a household below $1 million in assets, and one that can be set against the fee charged on that book. The index measures six dimensions of wellbeing that extend past the portfolio, including whether life feels full and whether the respondent has peace of mind, so the comparison covers more ground than investment performance alone.

Prosperity rose while sentiment soured. Sixty-one percent of respondents said the national economy had worsened over the prior six months, 59% said the political climate had and 58% said the cost of basic necessities had. The share describing themselves as prosperous rose to 77% from 73%. The largest gains came in feeling that life is very full, up five percentage points to 81%, and in having the tools and practices to feel at peace, up four points to 82%. InvestmentNews reported that the pattern suggests clients may separate their financial plan from macroeconomic anxiety more than advisors sometimes assume.