Young investors may not be as eager to eschew advisors and embrace online investing as the financial industry assumes, according to a new report by Cerulli Associates.

The Boston-based research firm found in a survey that many investors under age 45 are hesitant about plunging into the investing arena without the help of a human professional, with only 20% of emerging affluent investors saying they expect to open online accounts by themselves.

Those results fly in the face of built-in assumptions in the financial industry that young and presumably tech-savvy investors will jump at the chance to self-manage their investment accounts online, according to Cerulli.

“Providers’ dreams of successfully engaging emerging affluent investors with completely self-service digital platforms is an option that realistically appeals to a small fraction of this prospective client base,” Scott Smith, director at Cerulli, said in a statement. “Though younger investors are comfortable with many mediums of online engagement, digital investing is an unfamiliar and intimidating landscape where assistance is welcomed.”

The study defined "emerging affluent investors" as those under 45 who earn at least $125,000 annually and have less than $250,000 in investable assets. This market is considered fertile ground in the financial industry, since it’s composed of high-wage earners who have not yet accumulated enough assets to meet standard investment account minimums, Cerulli noted.

"Across the industry, large providers have been adding options to help them connect with younger investors, including digital advice platforms, increased brokerage options, and retirement and stock plan record-keeping units," Cerulli stated in its report. "However, the high expectations of younger investors are proving to be a challenge in delivering the levels of service they seek." 

When emerging affluent investors were asked whether they would consider opening an online investment account, 51% said they would prefer to do so with one-on-one support, with 29% saying they would want to do it during a meeting with a financial advisor and 22% wanting a company representative to walk them through the process.

Moreover, only 12% of emerging affluent investors said they would use their online accounts for buying and selling by themselves, Cerulli said. Forty-eight percent said they would want human assistance for those activities, including 29% who said they would want assistance from their financial advisor.

Overall, 60% of emerging affluent respondents would like to communicate with their advisor before executing a transaction, Cerulli said.

This preference for the involvement of advisors may tie into another finding in the Cerulli study: that emerging affluent investors have found it easier to work with financial advisors over the last five years.

Specifically, 34% of investors in this group said that they did not have difficulty working with financial advisors, which is up from 20% in 2017.

Survey respondents also indicated the most difficult thing about working with advisors was finding the right advisor to work with (27% gave this response).

Even with the survey results, however, Cerulli said that as the industry segment grows more refined, it's likely that younger investors will gradually grow more comfortable with online investing.

“By pairing leading-edge technology with specific customized advice and support delivered through human advisors and client care representatives as necessary, providers can create lifetime clients in this attractive client segment,” Smith said.