Most advisor-less investors think they can do the job better than a professional can.
It is a matter of fact that there are investors from an entire range of wealth levels that will not take advantage of the services of a financial advisor.
Occasionally, however, those investors change their mind, while some have their mind changed for them. It is those investors whom financial advisors should be trying to attract.
Spectrem Group’s new report Lost Without an Advisor: How to Attract Advisor-Less Investors looks into the choices made by investors who do not use a financial expert in making investment decisions.
The report, which studied investors with a net worth between $100,000 up to $25 million, compares investors who use advisors to those who do not. It also separates advisor-less investors into two groups – those that think they can do a better job than an advisor and those that do not use an advisor due to cost considerations.
Overall, 23 percent of investors do not use a financial advisor at all. Seventy-seven percent do use an advisor to some extent, obviously some more than others.
Looking at all investors, 20 percent say cost is a reason for not having an advisor, while 53 percent believe they can do a better job of investing, whether they have a financial advisor or not. There are other reasons listed for choosing not to have an advisor, including not believing that a financial advisor would have the investor’s best interests at heart (50 percent), believing the investor’s level of assets don’t warrant an advisor (11 percent) and those who use family or friends for assistance (9 percent),
Thirteen percent report not using an advisor because they don’t know how to choose one.
When differentiating between the two kinds of advisor-less investors, those that think they can do a better job investing are much older (average age: 62) than those who do not want to pay for an advisor (average age: 55). Perhaps because of the age difference, those who don’t pay for an advisor are also more likely to still be working (68 percent to 43 percent).
Kent McDill is a staff writer for Millionaire Corner. McDill spent 30 years as a sports writer, working for United Press International and the Daily Herald of Arlington Heights, Ill. From 1988-1999, he covered the Chicago Bulls for the Daily Herald, traveling with them every day through the nine-month season. He also covered the Bulls for UPI from 1985-88, and currently covers the team for www.nba.com. He has written two books on the Bulls, including the new title “100 Things Bulls Fans Should Know And Do Before They Die’, published by Triumph Books. In August 2013, his new book “100 Things Bears Fans Should Know And Do Before They Die” gets published.
In 2008, he resigned from the Herald and became a freelance writer. The Herald hired him to write business features and speeches for the Daily Herald Business Conferences and Awards presentations.
McDill also writes a monthly parenting column for the Herald’s Suburban Parent magazine.
McDill is the father of four children, and an active fan of soccer, Jimmy Buffett and all things Disney.