Opportunity for Advisory Firms with Self Directed Investors

Self-Directed investors represent a significant portion of investors and provide opportunity for financial services companies as well as advisory firms. With the advent of the Internet, access to information and research on investments, the Self-Directed investor has become force within the investing public. Often perceived as mavericks that can only be serviced by online brokerage firms, the reality is that Self-Directed investors can and do provide opportunity for advisory firms. While there are definitely some Self-Directed individuals who will never need assistance, others will eventually reach out to an advisory firm for expertise. These investors have unique and exacting needs that financial services companies cannot afford to overlook.

For this report, Spectrem Group included a wider segment of individuals than just those who specifically identify themselves as Self-Directed. This report includes those investors who control at least 75% of their wealth without the help of an advisor regardless of whether they use an advisor. The data includes respondents who are Mass Affluent ($100,000 to $1 million of Net Worth, not including primary residence [NIPR]), Millionaires ($1 million to $5 million of Net Worth, NIPR) and Ultra High Net Worth (UHNW - $5 million to $25 million Net Worth NIPR). Among those who qualify as “Self-Directed” for purposes of this report, there are 670 investors within the Mass Affluent, 193 Millionaires and 84 UHNW. For each wealth group, comparisons are made with those who are not Self-Directed within the same wealth segment.