Investors are keen to expand their advice relationships and their use of a variety of product solutions, according to a new report from Cerulli Associates. This is especially true of those younger than 50.
Cerulli and Phoenix Marketing International conducted surveys with investors in the second quarter when the pandemic was surging to find out their future appetite for various financial products and services.
The surveys found that 22% of respondents expected to increase their reliance on an advisor, but projected increases varied widely, from a high of 40% among investors in their 40s to just 9% among those in their 70s.
A similar pattern emerged regarding expectations for use of automated online investment services and budgeting apps. In both instances, investors under 40 showed heightened interest that grew among those in their 40s, then rapidly fell off among older investors.
“These results underscore the importance of establishing advice relationships with investors in their 40s, in many cases before substantial wealth accumulation,” Scott Smith, Cerulli’s director of advice relationships, said in a statement.
“Prospective clients in this segment are desperate for help in sorting out their competing financial priorities but draw little interest from traditional advisors unless they accumulate substantial assets.”
Smith said many firms try to fill this void with digital tools, but noted that although these serve ably on investment portfolios, they lack the emotional connection and customized advice investors look for on the other financial quandaries they face.