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When you really need a financial advisor

Everyone wants at least a little affirmation, especially when it comes to retirement savings.

A new survey from Financial Engines, which offers online financial advice through employer-sponsored retirement plans, finds that a majority of investors want at least some guidance from a human when they get close to retirement. Fifty-four percent of employees participating in retirement plans, such as a 401(k), who are not working with a financial advisor said they want one. Financial Engines surveyed more than 1,000 employees between the ages of 18 and 70.

"Money and financial decisions are emotional. Our survey shows that people still want to talk to somebody," said Kelly O'Donnell, executive vice president, at Financial Engines.

But concerns about the cost of financial advice, lack of retirement assets and uncertainty about how a financial advisor could really help were the top reasons stopping retirement investors from hiring an advisor, Financial Engines found. (See the chart below for the reasons among surveyed investors for not working with a financial advisor.)

Nearly 6 in 10 investors in target-date funds who aren't working with an advisor want one, according to the Financial Engines survey.

Target-date funds, which are designed to be set-it-and-forget-it portfolios without the help of a financial advisor, are popular because they are a default option in many retirement plans.

Eighty-three percent of employers with a retirement plan now offer a target-date fund, Deloitte found, up from 77 percent in 2013. Assets in target-date funds reached $700 billion last year, according to investment research firm Morningstar.

Financial Engines found that 44 percent of "do-it-myself" retirement investors not currently working with an advisor wanted to work with one in the future. "These investors are looking for an advisor to validate their approach," O'Donnell said.

So what do investors want advisors for? To determine how much was needed to save in order to reach a retirement goal, to figure out how to convert savings into income during retirement and to evaluate overall financial wellness, said the surveyed investors. Each goal received an average of about 70 percent of surveyed investors saying that it was extremely or somewhat valuable.

It's one thing to want financial advice and another to pay for it. Many advisors still charge a standard 1 percent annual fee for the assets they manage. It often doesn't make financial sense for advisors to pursue clients with small account balances.

Most robo-advisors, which provide automated investing advice, offer lower-cost guidance compared to the traditional 1 percent fee. Robo-advisors had an estimated $8 billion in assets under management as of July, a 34 percent increase from last year, according to financial research firm CB Insights. By 2020, assets in these services could grow to nearly $2.2 trillion, management consulting firm A.T. Kearney estimates. (That's still a relatively small piece of the overall asset management pie — Vanguard alone has about $3 trillion in global assets under management — but clearly significant.)

Yet whether it's financial advice from humans or an automated service, Financial Engines' survey may understate the true demand for financial guidance. All the responses from the investors surveyed were before the recent market volatility that started in late August.

"Investors want advice even more during volatile markets," O'Donnell said.