The self-directed investor segment is growing at a 4.9% clip, compared with the 1.4% snail’s pace of the non-self-directed segment, and brokers’ services are responding to this shift by building out their offerings, according to a report released Monday by Celent.
The research, commissioned by technology provider Scivantage, focused on factors driving growth in self-directed and advisor-led market, and on developments in trading activity and brokerage technology among these investors.
“The wealth management industry has undergone significant operational shifts as a result of changes in financial regulations and the increased role of technology,” Celent’s research director, Isabella Fonseca, said in a statement.
“In response to these broader industry trends, retail investors expect a more streamlined, hands-on trading experience, which has led to an increase in the self-directed population of traders.”
Regulations, client expectations and technology are driving change across the wealth management and online brokerage industries, the report said.
Now, clients want transparency, competitive pricing and quality client-centric service.
The report said a general sense of recovery and growth pervaded the market and brokerage firms. Customer daily average revenue trades and the number of customer brokerage accounts have grown steadily.
Mobile trading DARTs have been increasing since 2012, with 13% of all trades placed on a mobile device in 2014.
The U.S. online brokerage market is highly fragmented, according to the research, with the number of trading platforms having expanded and new firms having entered the market.
The average profile of the retail investor is expanding to include retirees, millennials and baby boomers.