Almost one-quarter of all American investors operate without the use of a financial advisor. Some do so because they don’t want to pay the fees (or don’t think their portfolio warrants an advisor) while others do so because they believe they can do a better job at investing than a professional.
However, even without using an advisor, these investors know what qualities they would want in an advisor if they decided to change their investing procedures.
Spectrem’s new study Lost Without an Advisor: How to Attract Advisor-Less Investors details the thinking of investors who do not currently use advisors. The study notes that only between 7 and 14 percent of those investors consider it likely that they will ever use an advisor.
First, let’s look at the opinions of investors who think they can do a better job investing than an advisor. Ninety-three percent of those investors say they want their advisor to be honest and trustworthy, and 90 percent want an advisor to provide transparency and keep the investor informed as to what they are doing.
Almost 90 percent would look at the investment record of an advisor, and 89 percent would examine the fees or commissions charged by the advisor. Three-quarters of investors who think they could outperform a financial advisor would want an advisor who offers products from a variety of different companies, and 71 percent would want their advisor to provide services via a website or online.
As might be expected, investors who think they could do a better job than a professional are more opinionated about what makes a good advisor than those investors who simply don’t use an advisor due to cost.
Among the investors who don’t want to spend money on an advisor, 87 percent would want an advisor who is honest and trustworthy and also would wan tan advisor who provides transparency and keeps the investor apprised of what is going on with the investments. Eighty-four percent would want to know the investment record of the advisor, and 73 percent would want an advisor who offers a variety of investment products from different companies.
For more information on the advisor-less investor, click here