To reach this investor cohort, providers must understand client needs at key intervals in their financial lives and streamline access to an advisor
Connect with Asset and Wealth Management Trends across the Americas in a new report from Cerulli Associates. Access the complete report here.
October 30, 2024, BOSTON—More than half of investors in self-directed investment accounts value the ability to speak with a human specialist associated with their financial provider, yet just 39% of these investors have tapped into this opportunity. Providers will need to connect with investors at key intervals to better understand investor needs and capture and retain walletshare, according to The Cerulli Edge—The Americas Asset and Wealth Management Edition.
Cerulli’s research finds more than one in five users of self-directed investment accounts (22%) say it is important to be able to talk to a human specialist linked with their account, and another 33% say it is somewhat important to have this capability.
Many are willing to pay for the privilege, too. According to the research, 42% of investors would likely pay to talk to a human specialist. Younger investors, who are the most inexperienced with self-directed investment accounts, are the most likely to pay for periodic advice, with one in five saying they are extremely likely to do so.
Despite a high demand for human advice within self-directed platforms, Cerulli’s research finds less than 40% of investors have ever used it. Those with less than $1 million in assets and those who are under age 30 are the least likely to opt in to this service.
Cerulli believes a significant opportunity exists for providers to transition clients toward an Advisor-Reliant relationship, but capitalizing on this opportunity will require understanding the situations that tend to drive investors toward wanting a conversation and making it easy for them to connect with advisors when the need arises.
“How providers define financial advice may not be the same as how investors and potential clients define it,” says Scott Smith, director. “Even among Self-Directed investors, advice may not necessarily need to be ongoing. Providers will need to understand when and why clients want advice to better match demand.”
Ultimately, if a full-service provider’s objective in offering self-directed brokerage accounts is to eventually transition those customers into advice relationships, they must make those interpersonal services visible to these clients—early and at the right time. “Early awareness with targeted email and notification campaigns at certain milestones can boost visibility. With this increased understanding, clients are more likely to stay in-house for their financial advice and likely advance to more comprehensive wealth management services as their financial pictures evolve,” he concludes.
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.
