The popularity of investment professionals is growing as fewer investors want to go it alone, according to Hearts & Wallets, a data resource and consulting firm based in Rye, N.Y.
Forty-six percent of consumers are using an investment professional, such an as a broker, financial planner or RIA, a 3 percentage point increase over last year, according to the Hearts & Wallets survey of 5,400 Americans. If you include others such as bank and insurance representatives, and digital or phone based services, the percent jumps to 66 percent.
According to the report, “Advice & Technology: Beyond Traditional Market Models, Receptivity to Professional Advice and Mobile Payments Connection,” people are using multiple sources for financial advice, including online research. Only 40 percent of those surveyed said they were their own best source of information on investing, a 15 percent decrease from those who said the same thing in 2010.
Somewhat contradicting themselves, 63 percent of the participants said they felt they were self-directed in their investment decisions.
“Consumers often believe they are self-directed, but closer analysis reveals a more complex reality,” said Laura Varas, CEO and founder of Hearts & Wallets. “In reality, consumers are taking advantage of the abundance of resources – digital, friends and family, or a trusted advisor – to make informed decisions. Financial firms should respect consumer self-narratives, and at the same time, create advice experiences that meet actual needs and behaviors.”
The use of mobile devices for conducting financial transactions has caught up to computer use, Hearts & Wallets said, especially with those aged 21 to 27. For this group, 68 percent now use mobile devices to manage finances compared to 62 percent who use computers. At the same time, 47 percent off all consumers use the services of an advisor but also use online resources.
“This hybrid trend continues to underscore the importance of human advisors in the advice experience,” Hearts & Wallets said.