Younger investors most willing to pay for financial advice: Cerulli

While more investors overall are willing to pay for financial advice today, 79% of those aged 30 to 39 are interested in paying for financial help, according to a recent study

Jan 4, 2017 @ 12:24 pm

By Liz Skinner

+ Zoom

More investors are willing to pay for financial advice today compared to nine years ago when the nation was on the cusp of an economic recession, and a surprising demographic is proving to be the most inclined.

About 50% of investors said they were interested in paying for financial advice when they were polled in late 2016, up from 40% in 2008, according to a report by Cerulli Associates issued on Wednesday. Those with the most money proved to be more likely to be willing to pay for help, the recent survey found.

But when it comes to age, unexpectedly, more of the younger cohorts were willing to invest in advice.

“Investors under age 40 express the greatest keenness to pay for financial advice,” said Scott Smith, director at Boston-based Cerulli Associates.

Specifically, 79% of investors aged 30 to 39 were interested in paying for financial help, the survey found. These households likely are having their first encounters with intimidating financial events such as home ownership, marriage and caring for children, the report said.

(More: XY Planning's Moore: Stop serving millennial clients 'Happy Meal' service)

About 73% of those under 30 said they were willing to pay for advice, compared to 54% of those 40 to 49, and about 44% of everyone 50 and older, the report found.

The results stand in contrast to the client demographics that the industry focuses on serving.

Most advisory firms seek out older clients because they have the greatest wealth and clients with low account balances tend not to provide enough revenue to run profitable businesses.

Many firms that do reach out to help younger investors offer cheaper digital platforms for investment and other planning guidance; however, that's not really what these investors want, the report from Cerulli said.

It would be more compelling for advisers to offer investors under 40 scalable, on-demand advisers from live advisers who can help investors with their challenging financial decisions, the report said.

(More: Must advisers manage money?)

“Digital options have become part of the landscape but consumers facing complex decision processes repeatedly choose to include humans in their service selections,” Mr. Smith said. “A belief in the trustworthiness and expertise of providers is a crucial element of these relationships.”

0
Comments

What do you think?

View comments

Recommended for you

Featured video

Events

Building digital relationships with a human touch

The word "robo" has stopped being a four-letter word for financial advisers. But how can it be an asset? Quovo's Jeff Hendren explains.

Video Spotlight

Will It Last As Long As Your Clients Do?

Sponsored by Prudential

Video Spotlight

The Catalyst

Sponsored by Pershing

Latest news & opinion

10 funds with largest 3-year outflows

Even well-managed funds that have beaten the S&P 500’s 10.1% average annual gain have watched investors flee.

Wirehouse training programs are back

At one time, major brokerage houses ran large, expensive training programs for thousands of young brokers, and now it looks as if they are about to return to that model.

New military pension rules need financial advisers to step up and serve

Matching defined contribution plan expected to see more money, more need for sound advice.

Brian Block's $4 million bonus was tied to a key metric at ARCP

Prosecution rests case in fraud trial against CFO of American Realty Capital Properties.

Edward Jones is winning the Google search war

Brokerage firm's digital marketing investment helps land it at the top of local and overall search engine results, report finds.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print