First, the good news: Affluent investors who have financial advisers generally are very satisfied with them. The bad news? More than 40% of those with $500,000 or more to invest would rather manage their money themselves.
According to a Dow Jones survey of 1,287 randomly selected U.S. investors who are at least 25 and have a minimum of a half-million dollars to invest (not including retirement plans), 41% say they use online and discount brokerages to manage their investments, By comparison, 31% use a full-service firm, while only 28% use independent firms.
Of those that do get help, 70% said they are extremely or very satisfied with the relationship.
In a conference call yesterday discussing the survey results, Meir Statman, a professor of finance at the Leavey School of Business of Santa Clara University, used a medical analogy to describe the way investors use online, self-directed investing. People who have some medical symptoms, she said, are often “validators” — that is, folks who go online to confirm their assumptions about their condition. But they still use professionals when the need arises.
“We get a lot of information from the Web about symptoms and so on, but when things are really serious, we see a physician. It is not one or the other,” Mr. Statman said. “Advisers should not see the Web as a threat.”
Mr. Statman and others on the panel said that the positive reviews that respondents gave of communications from their advisers is a sign that investors value their advice and would like more. Two-thirds of respondents said they receive a newsletter from their adviser and a surprisingly high 77% say they read it regularly.
Still, the investors identified several topics that their advisers had not counseled them on that investors wish they would. Tax strategies was the top missing subject, which 17% said they'd like to hear about from their advisers. Another 14% said they wanted to hear more about
estate planning, 13% wanted information on emerging markets and 12% would like to hear about alternative investments.
One-third of the surveyed investors said they have not developed a retirement plan with their adviser, while one in 10 listed retirement planning as a subject they would like to be advised on, but currently are not.
