Investors Working with Advisers Want a Collaborative Relationship

They want advisers to handle their investments but also to consult on their decisions.

Among investors working with a financial adviser, 68% say they want a collaborative relationship—meaning that they want their adviser to handle their investments but to consult with them on their decisions, according to the first quarter 2019 Wells Fargo/Gallup Investor and Retirement Optimism Index survey.

Only 14% want to invest on their own, based on advice from their adviser, and a mere 18% want to hand over all investment decisions to their adviser, with no consultation at all.

Among those working with an adviser, when asked what they view as the benefits of doing so, 94% say their adviser understands their personal investing needs and their financial well-being. Eighty-nine percent say having an adviser allows them to devote more energy to other things, to feel more confident about their finances (93%) and to relieve stress in their home life (78%).

Forty-six percent say they seek out a second opinion from another expert to confirm their adviser’s recommendations. Investors want to hear from their adviser, on average, three times a year. Sixty-three percent prefer a personal connection including in-person meetings (39%), phone calls (22%) and video calls (2%). Only 20% prefer to connect through Internet chart, and a mere 18% want to review their investments on their own, without any help from their adviser.

Among those who do not have an adviser, 73% say it costs too much, 52% would prefer to purchase index funds or automated investments directly, and 40% think they can invest better on their own.

Eighty-four percent say financial advisers will always be needed and will not be replaced by automated investing technology. Seventy-eight percent of investors either work with a financial adviser (56%) or would like to work with one (22%). Seventy-three percent believe the financial benefits that come from professional advice are worth the cost.

Asked what they value the most about their adviser, 68% of those working with one say turning to their adviser as a resource for answering questions.

Only 24% use automated investing technology without the assistance of an adviser. However, 56% prefer to work with an adviser who uses automated investing tools on their behalf.

Asked what services their adviser provides that they appreciate, 69% said “keeping me motivated and on track with my financial goals,” 63% said “understanding my personal life and family dynamics,” 55% said helping them to clarify their broader life values and goals, and 53% said including their teenage or older children in financial planning discussions.

“Financial advisers remain a vital source of advice for most investors,” says Wayne Badorf, head of intermediary distribution at Wells Fargo Asset Management. “People want advice and the ‘human touch’ when planning their financial futures. At the same time, they are prepared to embrace technology as part of the process. Financial advisers and technology can work together to help investors reach their saving and retirement goals.”

The survey also found some weakening in investor confidence. The Wells Fargo/Gallop Investor and Retirement Optimism Index slipped to 90, down from 98 in the fourth quarter of 2018.

That said, investors seem to remain generally optimistic about the economy, with 58% saying there are either very or somewhat optimistic that they will achieve their investment targets over the next 12 months. That increases to 62% over the next five years.

Seventy-five say they are highly or somewhat confident they will have enough to maintain their lifestyle in retirement, up from 72% in November. Fifty-four percent are either very or somewhat optimistic about economic growth, and 58% are either very or somewhat optimistic about the unemployment rate.

While 64% say it is a good time to invest in the markets, only 49% are optimistic about the stock market’s 12-month outlook, and a mere 31% are optimistic about inflation. Sixty-one percent are most focused on maximizing growth, while 39% are most concerned about protecting their assets from major losses.

The findings are based on a Gallup Panel web survey of 1,029 investors conducted in February.