Managed accounts a solution for many investors

Investors want help with investments, but sometimes they look beyond financial advisers

May 25, 2017 @ 12:33 pm

By InvestmentNews

Whether offered by a financial adviser or a robo firm, if peace of mind is what a client is looking for, he or she should look no further than a managed account.

That suggestion is implied by the results of two recent surveys, one from online wealth manager Personal Capital, which emphasizes the shortcomings of non-fiduciary human advisers, and another from Fidelity, which touts the advantages of managed accounts whether offered by a traditional adviser or a robo counterpart.

The Personal Capital online survey of investors and non-investors found that 70% question the trustworthiness of financial professionals, with 32% believing that a financial adviser is likely to take advantage of a consumer. Of the 54% Americans who do not work with a financial adviser, almost half — 45% — said the reason is lack of trust.

Trust wasn't the issue in the Fidelity study, where 23% of those who have a managed account said they like the arrangement because they prefer having financial professionals — whether human or robo — tell them what to do.

For those who invest in robo managed accounts, Fidelity found that trust in the firm's brand strength (at 36%) was the third most important reason for "going digital" after ease of use (50%) and low cost (41%).

Among all managed account holders, 89% believe that using a managed account simplifies their investing, Fidelity said in a release.

Personal Capital said its survey was conducted March 6-8, 2017 among 2,178 U.S. adults ages 18 and older, among whom 1,301 have at least one investment account. Fidelity's online survey was conducted October 24-31, 2016 among a sample of 400 respondents ages 25 and older who have $5,000 or more in a managed account.


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