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By 
February 05, 2024 at 02:41 PM
What You Need to Know
- Providing DIY investors with transparent fee schedules is critical to landing them as clients, Cerulli finds.
The boom in direct retail accounts at brokerages during the pandemic tapered off by 2022 as new investors began to seek more hands-off ways to steward their assets. According to a study released Monday by Cerulli Associates, this resulted in investors becoming more reliant on financial advisors who could navigate volatile markets.
The study predicts that the demand for trusted advisors and providers will continue to increase in 2024, given lingering economic concerns.
Cerulli noted that its research has repeatedly shown that affluent investors develop deep trust in advisors with whom they work closely. Before that, however, unadvised investors may be apprehensive about hiring an advisor because of cost concerns.
Show and Tell
Forty-six percent of prospective affluent clients in the study said that cost transparency was the most difficult aspect of working with an advisor, and 28% said that advisors were too expensive. Another 34% said they were uncertain whether advisors recommend the best products.
Advisors charge for their services in a variety of ways, whether asset-based fees or commission-based ones. According to Cerulli, this sometimes makes it hard for prospective clients to fully understand how much they will pay for advice, how they will do so and what type of advice they will receive.
