Investor Sentiment

Investors Increasingly Choose Advice

Demand for financial advice is growing and investors are increasingly satisfied with advice offerings

New research from Cerulli Associates and SIMFA reveals investors are willing to pay for advice, and also found broader demand for personalized, comprehensive advice.

November 30, 2023, BOSTON—New research, issued by Cerulli Associates and the Securities Industry and Financial Markets Association (SIFMA), highlights increasing demand for financial advice among U.S. investors. 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. The 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,” he adds.

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.

Investors seek advisors with a service set aligned with their financial goals...

“The data clearly indicates that Investors are increasingly choosing professional advice and recognize the value to navigate complicated choices. Trustworthiness and quality of service comprise the foundation of client satisfaction.” says Kenneth E. Bentsen, Jr. President and CEO, SIFMA.

Yet, 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,” Smith concludes. “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,” adds Smith

 

 

 

Methodology
These findings are based on the MarketCast Global Wealth Monitor Survey. MarketCast fields the largest affluent study in the United States, completing online surveys of more than 11,000 households throughout the year. The target market for this survey is comprised of two classifications of households: affluent households with more than $250,000 in investable assets and near-affluent households with more than $125,000 in household income and that are headed by someone who is younger than 45 years old. While less wealthy households are included for comparison purposes, the respondent base is wealthier and slightly younger than the American population overall.
About SIFMA
SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s one million employees, we advocate on legislation, regulation and business policy affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA).
About Cerulli Associates
For over 30 years, Cerulli has provided global asset and wealth management firms with unmatched, actionable insights.
Headquartered in Boston, Cerulli Associates is an international research and consulting firm that provides financial institutions with guidance in strategic positioning and new business development. Our analysts blend industry knowledge, original research, and data analysis to bring perspective to current market conditions and forecasts for future developments.