Young Investors Are Willing To Pay For Financial Advice: Study

The question gets asked often: is financial advice worth your money? However among younger investors, they take importance of the financial advice that they are willing to pay more. Find out why from this article.

Even amid today’s strong markets, investors are happy to pay for expert advice on their investments.

Those were the findings from a recent study performed between January and September 2016 by Cerulli Associates, a Boston-based research and consulting firm.

(C) TheStreet

(C) TheStreet

Half of the approximately 5,500 participants agreed with the statement, “I am willing to pay for advice regarding my financial investments.”

That’s up sharply from 2009 — the same year the S&P 500 Index hit its nadir — when 38 percent of investors said they would shell out for advice.

The increase in investors’ willingness to pay for advisors’ expertise comes at a time when robo-advisors have made investment advice available via algorithms for as low as 15 to 35 basis points.

In comparison, a human financial advisor can charge as much as 100 basis points — or 1 percent of assets under management.

The value proposition for financial advisors has changed in the last eight years, with a growing emphasis on a diversified approach to investing and providing holistic advice, according to Scott Smith, director at Cerulli.

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