Wealthy Investors Are Relying on Financial Advisors More Than Ever, Cerulli Says

KEY TAKEAWAYS

• Affluent investors are relying on financial advisors more than ever amid economic uncertainty, according to research from Cerulli Associates.
• Over two-fifths or 43% of affluent investors with over $100,000 in investable assets receive advice from financial advisors, up from 36% a year ago.
• Cerulli estimated that U.S. investors collectively hold about $55 trillion in total financial assets, a $10 trillion drop from the previous year after a tough year for markets in 2022.
• Wealthy investors with advisors cited personalized investment planning as their main reason for turning to a professional.

Affluent investors are working with financial advisors more than ever, turning to advisors for customized investment strategies amid economic uncertainty, according to Cerulli Associates research released Tuesday.

The share of affluent investors with household investable assets of at least $100,000 relying on an advisor grew to 43% this year, up from 36% in the past year, the research firm said.

“As the mass affluent grow increasingly focused on asset preservation, Cerulli’s research has documented an increased appetite for financial advice as well as a willingness to pay for it,” the firm said. 

The shift comes after a tough year for markets and retirement savings in 2022, with Cerulli estimating that American investors collectively hold about $55 trillion in total financial assets, down from $65 trillion last year.

And while nonfinancial assets such as real estate have made some gains "due to housing market growth, this has also slowed as high interest rates weigh on the demand for housing," the firm noted.

Today, more than half (55%) of advised assets reside within fiduciary advisory accounts, up from 34% in 2011, as “investors have chosen to move away from transactional brokerage relationships in favor of long-term advice relationships,” Cerulli said. Customized investment plans were a major factor driving people to turn to advisors, according to 67% of affluent investors surveyed.

“Affluent investors are passionate about making sure that their advisors are offering solutions customized to their needs and goals,” said Scott Smith, director at Cerulli, adding that “to align themselves with these priorities, advisors must dedicate themselves to understanding the circumstances, preferences, and goals of each client household.”