As more newer and younger investors enter the retail market, the demand for advisory services is growing, and has spurred asset managers to provide hybrid advice services that include both digital and human platforms, details an article in the Financial Times.
Over the past year, new share trading account openings have surged, driven in part by strong market gains and stimulus measures that have kept interest rates low. New accounts jumped from 35 million in 2016 to 63 million by the end of 2020, with 15% of all US equity investors starting out last year alone—and with a median age of 35, according to the article.
While many new investors seek out advice simply to be more thoughtful in their investing, others turn to professional help after losing money on their first foray into the markets. More and more, investors are seeking out commission-fee share trading services, along with easy ways to buy small pieces of highly priced stocks, the article continues.
But these investors aren’t short-term risk takers; they want to make informed decisions. To fill that need, many financial institutions have launched advisory services, driven by “accessibility, affordability, and awareness.” What are most of these investors putting their funds into ETFs, low-cost mutual funds, and SMAs. And clients are pushing their advisors to apply environmental, social, and governance metrics to their portfolios. As barriers continue to fall and more retail investors enter the market, expect advisors to offer plenty of options in order to win and keep their customers.