Business Insights

Self-Directed Investors Express Appetite For More Hands-On Advice

Wealth management providers have an opportunity to drive self-directed investors toward advice relationships

A new report from Cerulli Associates serves as a guidebook to optimizing firms’ strategies to designing and addressing retail investment platforms. Access the report here.

June 6, 2024, BOSTON—Although self-directed investors view themselves as independent, they find value in human advice, according to The Cerulli Report—U.S. Retail Investor Products and Platforms 2024. To convert these investors into formally advised clients, wealth management providers must be able to successfully lead clients through their platform via targeted customer service offerings, while also removing key friction points between a client’s desire for greater financial advice and the platform’s ability to connect them to the advisors that can provide it.

According to Cerulli’s research, more than one in five users of self-directed investment accounts (22%) say that it is important to be able to talk to a human specialist linked with their account, with another 33% saying it is somewhat important to have that capability.

Aside from the importance of speaking with a human specialist, most are willing to pay for the privilege—42% say they would be at least somewhat likely to pay to talk to a human specialist. Younger investors, who are the most inexperienced with self-directed investment accounts, are the most likely to offer to pay for periodic advice, with one in five saying they are extremely likely to do so.

However, despite a high demand for human advice within self-directed platforms, just 39% of respondents state that they have ever used an advisor. Those with less than $1 million in investable assets and those who are under the age of 30 have been least likely to opt into this service. Low adoption is a significant hurdle for providers looking to use human interactions as a leverage point for greater financial advice delivery. To ease this transition, platform providers must ensure that clients can easily contact specialists with questions as the need arises to facilitate relationship development.

For larger firms with multiple lines of business, the pathway to closer engagement can be highly efficient if the walls between the units are lowered...

“If a full-service provider’s objective of offering self-directed brokerage accounts is to eventually transition those customers into advice relationships, they must make those interpersonal services visible to those clients,” says John McKenna, analyst. “Early awareness, through targeted e-mail and notification campaigns at a given milestone, can boost this awareness. With this increased awareness, clients may become more likely to stay in-house for future financial advice.”

For larger firms with multiple lines of business, the pathway to closer engagement can be highly efficient if the walls between the units are lowered. “A critical mass of customers wants greater financial advice, particularly younger customers in the direct and banking channels, but might not know when or how to acquire it on their own,” says McKenna. “By identifying the moments of greatest need, transitioning clients to more advised relationships can lead to increased walletshare and more harmonious one-stop shopping for all financial needs, creating loyal customers for decades to come.”




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.