Year over year, RIAs and fee-based advisors say enhancing profitability is the number-one practice management concern, and the number-one way to increase profitability is by adding new clients, according to our annual “Advisor Authority” study of roughly 1,600 RIAs, fee-based advisors and individual investors.

Differentiating your practice to attract and retain clients has become more important as competition increases, fee compression is on the rise and commoditization of financial advice puts more pressure on your bottom line. As you look for new ways to tap into new markets, “Do It Yourself” investors present a compelling opportunity.

Who Is Most Likely To Go It Alone?

More than one-third of investors do not work with an advisor (38%). This breaks down to four in 10 (42%) mass affluent and emerging HNW investors, and one-quarter (25%) of HNW and ultra HNW investors. The potential is huge.

This year’s “Advisor Authority” study shows that the majority of investors without a financial advisor (59%) say the primary reason they go it alone is because they prefer to manage their own assets. As they move up the AUM scale, more than two-thirds of the HNW and UHNW investors without an advisor (68%) prefer to manage their own assets. In addition, more than three-fourths of men investors without an advisor (78%), compared to just under half of women investors without an advisor (49%), prefer to manage their own assets.

DIY investing has evolved, as online access to virtually unlimited information has empowered consumers. Nearly every type of investor can educate themselves to understand more about their basic financial needs. Now, the fundamentals of tax preparation, portfolio management and financial planning have become automated with simple online tools. And just like consumers, more RIAs and fee-based advisors are adopting digital solutions to benefit their practice and their clients.

There’s no doubt these DIY solutions have created more awareness, tremendous cost savings and greater consumer value. But are DIY investors truly prepared to go it alone? Information is only as good as its source. Access to more online tools is only part of the equation. And when it comes to comprehensive holistic planning, there’s still not an “app for that.”  To ensure the best financial outcomes, there is no replacement for the power of transparent and unbiased guided advice.

So what matters most to DIY investors? And how can you adapt, to gain their trust and win their business?

Inside The Mind Of DIY Investors

More than half of investors without an advisor (54%) have an optimistic financial outlook for 2019. Yet, there’s an obvious disconnect, as only 38% have an optimistic outlook for the U.S. economy and only 36% have an optimistic outlook for the U.S. stock market. Nearly half (49%) are concerned about a U.S. economic recession and nearly two-thirds (64%) believe market volatility will increase. Clearly, DIY investors are highly attuned—and highly apprehensive—about the challenges that lie ahead.

Lawmakers at home and abroad continue to dominate the headlines—and remain top of mind for DIY investors. They say gridlock in Washington, interest rates and global instability are the top three drivers of market volatility. They also believe gridlock in Washington, taxes and ongoing volatility are the top three macro factors that will most adversely impact their portfolios this year. Yet only 20% of DIY investors are likely to take action and revise their investing strategy over the next 12 months.

When it comes to their top financial concerns, DIY investors say the cost of health care and taxes are tied for number one, while protecting assets and saving enough for retirement are tied for number two. Yet, only 57% of investors without an advisor have a strategy in place to protect their assets against market risk. And only 63% of investors without an advisor have a strategy in place to help protect themselves against outliving their savings.

How You Can Engage DIY Investors

This year’s “Advisor Authority” study reveals what matters most to DIY investors. And the preparation gap makes it clear that they could benefit from partnering with you to establish long-term goals, create a holistic financial plan and make more informed financial decisions. By understanding what they want, and solving their most urgent needs, you can gain their trust and win their business. Consider these four factors:

1. Put Clients First

When we asked DIY investors what would make them more likely to work with a financial advisor, the clear preferences by a wide margin were advisor experience and a fiduciary standard. To attract and retain DIY investors, a trusted advisor should be like a trusted physician who provides an annual check-up to pre-empt issues before they happen; like a trusted coach who develops goals and then challenges clients to meet and exceed them; like a trusted partner who commits to putting a client’s best interest before their own to help them reach the next level. This year’s study also shows that more than two-thirds of DIY investors (68%) believe there should be one federal fiduciary standard industry-wide

2. Provide Holistic Financial Planning

DIY investors want more than portfolio management. Among the factors that would make them more likely to work with an advisor, holistic financial planning was in the top three. This includes managing across all of a client’s holdings, considering the full scope of their assets and liabilities, managing for the impact of taxes, assessing and addressing macro and micro risks, integrating “held-away” accounts such as insurance and annuities. Holistic planning goes beyond the individual client’s needs to incorporate their entire family, with solutions to finance children’s educations, care for aging parents, and establish a legacy plan for philanthropies and generations to come.

3. Protect Assets Against Market Risk

With volatility on the rise, 88% of RIAs and fee-based advisors have a strategy to protect their clients’ assets against market risk—compared to only 57% of investors without an advisor. Nearly two-thirds of advisors (62%) and more than two-thirds of DIY investors (68%) agree that diversification is the most utilized solution.

To provide their clients with a comprehensive approach to risk management, RIAs and fee-based advisors use a more diverse range of solutions than DIY investors—including fixed annuities (53% vs. 17%), fixed index annuities (48% vs. 11%), liquid alternatives (44% vs. 19%) and smart beta ETFs (29% vs. 3%). Show DIY investors how a more sophisticated approach to risk management, including the skilled use of low-cost, no-load insurance and investing solutions, can help them capture more upside, while protecting against downside, to preserve their portfolio for the long haul.

4. Protect Against Outliving Their Savings

As the safety net fails while lifespans increase, the retirement income challenge is real and growing. In 1998, 59% of Fortune 500 companies offered a defined benefit pension plan, but by 2017 this had declined to only 16%. According to AARP, the Social Security trusts are expected to run out of cash by 2034, after which they will only be able to pay 79% of promised benefits. And the Nationwide Retirement Institute found that 70% of older adults believe they are eligible for full Social Security benefits years before they actually are.

To help clients prepare for and live in retirement, 87% of RIAs and fee-based advisors have a strategy to protect clients against outliving their savings, compared to only 63% of investors without an advisor. While half of RIAs and fee-based advisors (52%) say Social Security is a pillar of their retirement income strategy, more than two-thirds of DIY investors (69%) rely on Social Security as the foundation.

RIAs and fee-based advisors employ a far different set of solutions than most DIY investors—including variable annuities with living benefit riders (53% vs 20%), fixed income ladders/bond ladders (50% vs. 9%), longevity insurance/deferred income annuities (or DIAs 38% vs 9%), single premium immediate annuities (or SPIAs 38% vs 9%) and qualifying longevity annuity contracts (or QLACs 35% vs. 3%). Help DIY investors understand how an expanding category of fee-based insurance, that is simple and transparent with lower costs and more choice, can help them generate more retirement income—and protect that income for life.

Position Your Practice For Greater Success

More than a decade after the Financial Crisis of 2008, concern about volatility is again top of mind—and uncertainty is on the rise. As markets remain turbulent, and the world around them becomes increasingly complex, DIY investors can benefit from guided advice to close the preparation gap.

“Advisor Authority” reveals that the key to engaging DIY investors starts with an experienced advisor who commits to a fiduciary standard that puts the client’s best interest first. It requires holistic planning that moves well beyond the basics of managing their assets and creating the “safe havens” DIY investors can’t create for themselves. By positioning your practice to help DIY investors build more wealth, you also position your practice for greater growth, greater profits—and greater success.

Craig Hawley is the head of Nationwide Advisory Solutions.