Investors have become more willing to pay for financial advice over the past decade, a study by Cerulli found.
The January edition of The Cerulli Edge found that from 2008 to the third quarter of 2016, the percentage of investors who are willing to pay for investment advice has grown from 40% to 50%. The percentage of those who are not willing to pay for advice has fallen just four points from 29% to 25%.
Younger investors are the most willing to pay for advice, the study found, with 79% of households between 30 and 39, and 73% of households under 30, saying they were willing to pay for advice.
“Investor households in this age cohort are often having their first encounters with many of the most intimidating financial events in their lives,” the report noted. “Homeownership, marriage, child rearing, and all the financial factors associated with them present some of the most important financial decisions investors can make.”
Advisors may be reluctant to target this demographic, as they typically have fewer assets than older households, and the bulk of those assets are frequently tied up in employer-sponsored retirement plans with their own built-in investments.
Firms can create profitable long-term relationships with these investors, Cerulli suggested, by offering “scalable on-demand advice from real advisors” who can help these investors put their financial decisions in context.