Filed Under:Life Insurance, Life Planning Strategies

Mass affluent market remains largely untapped

Investors with less than $500,000 in investable assets remain largely underserved by advisors, according to a new report.

Cerulli Associates, Boston, arrives at this conclusion in its first quarter, 2013 issue of “The Cerulli Edge, Managed Accounts Edition.” The survey explores the managed account process and provides a quantitative update on assets and growth rates, program sponsors, third-party vendors, asset managers and cash flows.

The report finds that 34 percent of investors with between $100,000 and $500,000 in investable assets agree that they need more financial advice.

“These investors, are not the priority of practices targeting the higher wealth tiers, but they represent a largely untapped and profitable market for the vast majority of advisors,” the report states.

The survey adds that investors with $100,000 to $500,000 in investable assets tend to rely on themselves (52 percent of those polled) and friends or relatives (22 percent) more than full-service advisory firms (24 percent) or independent advisors (11 percent) as sources of financial advice.

Among investors with $500,000 to $2 million investable assets, the results are less skewed towards the do-it-yourselfers: Just over 6 in 10 investors look to themselves (44 percent) or friends/relatives (19 percent) for financial advice. This compares to 40 percent and 14 percent, respectively, of investors in this cohort who prefer a full-service broker/investment firm or independent advisor.

When asked whether they would be willing to pay for financial advice, 34 percent of investors agree with the statement, the survey shows. The finding is on par with the results of prior years:

● 2008: 31 percent

● 2009: 32 percent

● 2010: 34 percent; and

● 2011: 33 percent.

The proportion of investors who indicate they would be prepared to pay for financial advice, 35 percent of those polled, also is comparable to results of the prior year surveys.  And 31 percent of respondents are “neutral” about the statement.

 

 

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