Although financial markets recovered quickly from the 2Q 2020 pandemic-induced downturn, economic optimism failed to move in tandem. Advisors need to emphasize long-term planning, provide tools for consolidating assets when needed, and understand investors’ concerns during a period of short-term uncertainty, according to The Cerulli Edge—U.S. Asset and Wealth Management Edition.

According to Cerulli, close to one-third (34%) of retail investors report the need to take more control over their own investments. This notion is inversely correlated with age, declining from a high of 60% for respondents under age 30 to just 12% of those age 70 and older. Investors with automated online service providers (57%) are the most likely to want more control, while those with independent providers (18%) are most comfortable with their existing level of control.

As investors cope with the impact of pronounced volatility relating to employment, political and societal affairs, and their own health, Cerulli expects the percentage of self-identifying moderate investors—a measure that has remained close to two-thirds since 2014—to evolve. Providers must be equipped for the shift with tools to help assess the capacity and appetite for portfolio risk, according to Scott Smith, director at Cerulli. “Client-facing staff need to be prepared to help investors reach their goals and mitigate risk with portfolios that are optimally designed,” he comments.

Providers that can consolidate their clients’ financial picture while providing easier access to their finances will also satisfy investors’ increased demand for control, resulting in deeper client-provider relationships. With tools such as budget planning through digital banking and investment options based on risk tolerance, providing personalized services can create customized goals-oriented planning for younger and older investors based on their investment needs, while also “nudging” clients toward better financial decisions to yield larger portfolios.

Overall, 61% of investors agree that they are willing to take calculated risks to make more money from their investments. While the number of respondents reporting an aggressive risk profile overall is minimal, investors remain interested in seizing opportunities to profit provided that their action is calculated. “Ultimately, when risk and reward is presented to clients in an intuitive way, and in a manner that allows them to see the strategies in relation to their financial goals, it becomes easier to make an educated investment decision while allowing for otherwise risk-averse clients to make the most out of rising markets—even in more unstable times,” concludes Smith.