Converting Self-Managed Investors


Millions of American investors use the services of a financial advisor to assist them as they navigate the path to creating a solid and profitable portfolio.

But there are millions of investors who invest on their own, eschewing the services of a financial advisor for a variety of reasons.

Spectrem has asked those investors why they don’t use financial advisors, and what might cause them to change their mind in the near future.

In the new Spectrem study Converting Self-Managed Investors, those investors who self-describe as minimally using advisors and those who do not use advisors at all to describe their attitudes towards financial advisors.

The two most popular reasons a self-managing investor does not employ the services of a financial advisor is that the investor feels they can do a better job investing than a professional, and that advisors do not primarily look out for the best interests of the investor.

·         The first reason practically demands that an advisor interested in working with a self-managing investor prove the investor to be incorrect in his assessment of his own investing skills and the skills and performance of the advisor. 

·         The second reason boils down to an issue of trust. The Spectrem report discusses the behaviors an advisor can display in order to gain the trust of a self-managing investor so that the investor understands the advisor does indeed have the best interests of the investor at heart.

A second topic in the report is the No. 1 characteristic of an advisor that might cause the investor to work with the advisor.

·         Being honest and trustworthy was most often selected as the No. 1 factor in choosing an advisor (25 percent), but at a lower percentage than among those investors who have an advisor (31 percent).

·         Where self-managed investors differ most greatly from investors who have advisors is that 19 percent consider fees and commissions to be the No. 1 reason they would hire an advisor. That means the investor needs to believe the cost of hiring an advisor makes fiscal sense, and, again, that would require a lengthy explanation of how fees and commissions are determined. Those charges would need to be compared to the value of the advisor to show that they make sense to the investor’s bottom line.

More information about the report or other Spectrem studies and publications can be found at



©2019 Spectrem Group

Keywords: investors, advisors, spectrem, self-managed, self-directed, advisor dependency