For investors who do not use financial advisors, convincing them to change their mind is not going to be an easy task.
According to Spectrem’s new study How to Attract Advisor-Less Investors, there are two categories of investors who do not use advisors: those who think they can do a better job than advisors in handing their investments, and those who think it is too expensive to use an advisor.
Among those who think the can do a better job, 70 percent say it is unlikely or very unlikely they will begin to use an advisor any time soon. Those who say it is too expensive are more flexible, with only 34 percent saying it is unlikely or very unlikely they will begin to use an advisor.
The study asked those investors to consider factors related to the advisor that might create a better sense of trust in advisors in today’s digital world of communication and information dissemination. A greater frequency of one-on-one meetings met the greatest approval, with 48 percent of investors who don’t want to pay for services and 40 percent of investors who think they can outperform advisors agreeing that would increase trust.
Those investors also liked the idea of more frequent communications via newsletters or bulletins. Twenty-five percent of investors who do not want to pay for services liked that idea as a way to build trust in advisors, and 19 percent of investors who believe they can outsmart advisors thought so as well.
Investors were unimpressed with the idea of increasing use of social media as a way to develop trust. They were slightly more interested in an increased use of video-chat services as a way to substitute for one-on-one meetings, with approximately 10 percent of advisor-less investors agreeing Skype and other services would increase trust.
Between 35 and 44 percent of advisor-less investors say none of the suggested ideas would increase trust.
Investors who believe they can do a better job than an advisor are more likely to approve of meeting with an advisor through technologies like a personal computer (47 percent), tablet or e-reader (39 percent) or smartphone (33 percent). Those investors who don’t want to pay for services were less likely to like the idea of talking to advisors through technology (42 percent would do so on a personal computer, 34 percent would use a tablet and 33 percent would use a smartphone).
To learn more about the Advisor-less investor, click here