Almost 30% of high-net-worth investors consider themselves self-directed, a survey from Cerulli Associates found, which “helps explain the dispersion of assets among providers,” Donnie Ethier, associate director at Cerulli, said in a statement.
“Although the direct channel’s surge in the high-net-worth market share gains have stemmed in more recent years, providers continue to boost their high-net-worth capabilities and presence among younger, tech-savvy wealth creators,” Ethie added. “For wealth managers, they represent increasingly worthy competitors that will likely test traditional managers’ willingness, and aptitude, to adapt to next-generation investors.”
The “High-Net-Worth and Ultra-High-Net-Worth Markets 2014: Addressing the Unique Needs of Wealthy Families” report found investors with $5 million or more in investable assets control about $11.3 trillion and represent about 0.9% of the U.S. population.
Ethier said that as assets increase the self-directed model becomes “less favorable” relative to other models as the difficulty of managing a more complex portfolio increases.
“In addition to dealing with complex portfolios, advisors are an added expenditure, which can explain their lower use among retail clients,” Ethier added.