How Age and Wealth Impact Advisor Usage


The stock market took a deep dive in the first three months of 2020 thanks to the advance of COVID-19, the illness also known as the coronavirus. The highly contagious disease has claimed thousands of lives worldwide, made millions of people ill, and caused governments to issue quarantine orders to citizens to prevent further spread of the disease.

As a result, the global economy has been crushed, and the American stock market saw severe decreases, especially throughout the month of March when the severity of the virus and its effects was most clearly known.

It sure seems like a good time to be able to discuss investment strategies and specifics with a financial advisor, doesn’t it?

But it is always a little surprising to find out how many affluent investors operate without a financial advisor.

Spectrem’s annual study Evolving Investor Attitudes and Behaviors* finds in 2020 that 57 percent of all investors with a net worth over $100,000 up to $25 million have a primary financial advisor. Those net worth figures do not include the value of their primary residence.

As might be expected, the wealthier the investor, the more likely they are to have a financial advisor. That being said, only 67 percent of investors with a net worth between $15 million and $25 million have a primary financial advisor. One must wonder how they are handling all of the matters that have come up in regard to investment strategies as the coronavirus kicks the stock market for three months straight.

As far as net worth goes, only 30 percent of those with a net worth under $500,000 have a primary financial advisor, and those investors often state they either don’t feel they can afford an advisor or their portfolio does not suffice in order to work with someone. However, there is a significant jump to 48 percent of those investors with a net worth between $500,000 and $1 million, and again a jump to 61 percent for those investors who have a net worth between $1 million and $2 million.

For advisors, the task is finding those investors as their net worth climbs.

Those net worth numbers align with age segmentation among investors. Only 36 percent of Millennials have an advisor compared to 50 percent of Gen X investors, and 60 percent for the Baby Boomers and World War II investors, who still dominate the population among the research subjects.



*This research is part of your Spectrem subscription.


©Spectrem 2020

Keywords: age, wealth, investors, advisors, Spectrem, usage, attitudes, behaviors