Emerging Affluent Investors Shy Away from Digital-Only Investing Platforms

March 8, 2022 — Boston

Client segment opts for human support rather than self-service models

Despite their status as “digital natives,” the majority of emerging affluent investors—those under age 45 who earn at least $125,000 annually but have less than $250,000 in investable assets—have yet to become comfortable with entrusting their assets to digital-only investing platforms, according to the latest Cerulli Edge—U.S. Retail Investor Edition.

The research finds only 20% of emerging affluent investors expect to open online accounts with no support. Close to half (51%) express a preference for one-on-one support when opening an account, with 29% indicating they would like to do so during an advisor meeting and an additional 22% hoping a service-focused rep would walk them through the process.

They exhibit the same tendency when monitoring the performance of their portfolio, preferring human assistance versus self-led engagement. Only 17% prefer to monitor investment performance as opposed to 29% of wealthier investors. When asked about their preferences for changing their portfolios by buying or selling specific securities, only 12% anticipate doing it themselves online, while 48% prefer human assistance, preferably from their advisor (29%). Overall, more than half (60%) of emerging affluent respondents would like to communicate with their advisor prior to executing a transaction.

“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,” says Scott Smith, director. “Though younger investors are comfortable with many mediums of online engagement, digital investing is an unfamiliar and intimidating landscape where assistance is welcomed.”

However, given this client segment’s status as digital natives, Cerulli anticipates their adoption of online tools will likely not be a long or particularly difficult journey. “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,” concludes Smith.

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Note to editors

These findings and more are from The Cerulli Edge—U.S. Retail Investor Edition, 1Q 2022 Issue.

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