A recent report by Cerulli Associates and the Securities Industry and Financial Markets Association, highlights increasing demand for financial advice among U.S. investors.
The report says that since 2009, the “advised” investor segment has grown from 35% to 47%, while those who consider themselves “self-directed” has fallen from 41% to just 24%.
Despite a seemingly unlimited array of information and tools designed to empower investors to take an active role in managing their own investments, the research finds that 63% of investors indicate a willingness to pay for advice, up from 38% in 2009. According to the study, research also finds broader demand for personalized, comprehensive advice.
Interest in formal financial plans has increased from 38% to 54% over the last 14 years, allowing advisors greater opportunity to assist clients on the way to achieving their financial goals while increasing satisfaction with their advice relationships.
“Investors seek advisors with a service set aligned with their financial goals,” says Scott Smith, director. “Looking forward, we believe demand will be centered around personalized comprehensive advice delivered through trusted advisors.”
According to the report, recent market volatility has had minimal impact on demand or retention—investor satisfaction with advisors and providers remains near all-time highs, with 81% of investors expressing satisfaction with their advisor and provider.
“The data clearly indicates that Investors are increasingly choosing professional advice and recognize the value to navigate complicated choices,” says Kenneth E. Bentsen Jr., president and CEO, SIFMA. “Trustworthiness and quality of service comprise the foundation of client satisfaction.”
Yet, Cerulli says that as advisors seek to ensure long-term client growth, scalable advice solutions employed to engage clients before they have met traditionally targeted wealth levels will be important.
“Displacing providers will become increasingly difficult as incumbents find more ways to extend the breadth of their client relationships,” said Smith. “The more advised clients feel that someone is looking out for them early on, the harder it will be to break the trust and loyalty that comes with the advice relationship.”
Headquartered in Boston with offices in London and Singapore, Cerulli Associates is a global research and consulting firm.
The Securities Industry and Financial Markets Association is a trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. SIFMA has offices in New York and Washington, D.C. and is the U.S. regional member of the Global Financial Markets Association (GFMA).