Participants Do Asset Management, Solo Style

Nearly half of participants manage their own assets, an indication of the confidence they have in their investment knowledge and acumen, according to a survey by Spectrem’s Millionaire Corner.

These retirement plan participants represent an opportunity for financial advisers, says Catherine McBreen, president of Millionaire Corner. “Part of their reluctance to use a financial adviser might not stem so much from confidence in their own knowledge and abilities, but the fact that they might think they don’t have enough net worth that requires an adviser’s services. But our research has found that those who work with a financial adviser cite increased knowledge and peace of mind as two of the primary benefits.”

Younger respondents are likelier to hold this self-directed mindset compared to older participants. Those under the age of 35 said they control 65% of their assets without professional help, while participants between the ages of 35 and 49 control 74% of their assets. Somewhere between the two groups are survey respondents between the ages of 50 and 64, who control 62% of their assets without professional assistance. Seniors over 65 control just over half (56%) of their assets.

Almost a fifth of plan participants (19%) said they’ve never even considered using a financial adviser. Across the age groups, this attitude is most prevalent among the youngest respondents. In fact, 26% of those under 35 said they did not consider using an adviser, compared with 13% of seniors.

Not surprisingly, plan balance is a factor in considerations regarding use of a financial adviser. Those with under $10,000 are the most likely to say that they have not considered consulting an adviser (25%), compared with 14% of those with at least $100,000 in plan balances.

Most plan participants identify themselves as self-directed investors, but just over one-third (35%) said adviser use is event-driven, meaning that specific financial situations—needing information about asset allocation, or the desire to save for college or retirement—could guide them to seek financial advice from a professional.

Those who do use an adviser are more apt to attribute their financial success mostly to themselves. Nearly three-in-ten (28%) said they are relying less on an adviser, while 21% said they have a portion of their investments with an adviser to compare results with their own investing.

This investment confidence comes in part from confidence in their financial knowledge and their proactive pursuit of financial information. Nearly two-thirds (62%) said they feel that much more and much better information on investments is available.