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Financial advisers can add profitable business from less obvious market segments, one of which is investors who have never had an adviser
Financial advisers can add profitable business from less obvious market segments, one of which is investors who have never had an adviser.
That means younger, less wealthy investors who typically are ignored by most advisers because they prefer to deal with bigger fish. Such investors are less likely to use an adviser, according to a study that Fidelity Investments released recently.
PROFIT POTENTIAL
But young, mass-affluent investors, those with between $100,000 and $999,999 to invest, can be profitable for an adviser who caters to that group’s love of high-technology, low-touch business relationships, according to the study.
“Saving time is important to them, and finding ways to provide efficiency is a win-win,” said Gail Graham, an executive vice president of Fidelity Institutional Wealth Services. “The trends I see coming on the horizon are more tools so advisers can collaborate on ideas in building a financial plan with their clients and share information back and forth online.”
According to the study, 24% of these young, mass-affluent households don’t work with a broker or adviser but would consider it.
The main things holding them back are a dislike of fees, a lack of trust of brokers and advisers, and a desire for more control over their money. Technology can help address all those issues, Ms. Graham said.
And if advisers are looking for that proverbial eccentric millionaire who has never used an adviser, they might want to give up, according to the study. There are 6 million unadvised investor households with less than $1 million in investible assets, or six times as many as unadvised investors with more than $1 million to invest.
Email Lavonne Kuykendall at lkuykendall@investmentnews .com
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