Key Influences on Investor Decisions: Hearts & Wallets Finds Do-it-Yourselfers Use Financial Professionals; Role of Phone Reps Grow
Most Americans say they are do-it-yourself investors, but 60% of DIYers also use financial professionals, according to a new research report by Hearts & Wallets, the independent research and benchmarking firm that specializes in saving, investing and financial advice.
Advice & Technology: Opportunities for Hybrid Models, Workplace Resources and Differentiation Among Financial Professionals covers use of information sources, including financial professionals, employer-sponsored plans and technology. For example, 84% of millennials with $100,000-plus use 7 or more sources. This report is based on a survey of 5,794 U.S. households from the Hearts & Wallets Investor Quantitativetm Database with over 120 million data points on saving, investing and advice from over 70,000 U.S. households dating from 2010.
Decision-Making Preferences
65% of households in 2021 say they want to make decisions and manage money on their own with the preference to delegate dropping to 12% in 2021 from 20% in 2010. Saying and doing are two different things. 60% of households who prefer self-direction use some type of financial professional. An increasing number of Americans rely on multiple information sources. 43% of households use 7-plus sources today, triple the 14% of households in 2010.
Role of Financial Professionals
More households turn to financial professionals above other sources of investing information and advice except for "myself" or spouse/partners, with use of financial professionals up to 71% in 2021 vs. 68% in 2010. Use of paid financial professionals is now at 47%. Use of "other" types of financial professionals is at 64% today, including phone-based mutual fund company or online brokerage representatives, accountants, bank representatives and insurance representatives. Among "other" financial professionals, phone-based reps have doubled in influence over the past decade, with use jumping from 16% in 2010 to 31% in 2021.
"Customers and prospects are interacting with more sources than ever to make investing decisions," Laura Varas, CEO and founder of Hearts & Wallets, said. "To craft service models and distribution strategy, firms should understand investor behaviors at the national level, but more importantly for their specific design targets."
Among key sources for investors:
- Online, financial statements and employer-sponsored plans ? biggest increases in use over past decade
- Financial professionals (paid or other) ? primary source for 20% of U.S. households, one third of Baby Boomers and the most affluent Gen X
- Family ? primary for 1 in 7 Gen Z and millennial households
- Employer programs ? source to some degree for 2 of 3 Gen X and millennials
About Hearts & Wallets
Hearts & Wallets is the independent research and benchmarking firm that specializes in saving, investing and financial advice. Leading firms rely upon Hearts & Wallets research reports, software and benchmarking to make strategic decisions that lead to growth by improving products, distribution, pricing, positioning, and targeting. For more information visit www.heartsandwallets.com.
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