US Insights

Growing jones for financial advice

Joe Hagan

Former Senior Vice President

Economy 11.06.2015 / 00:10

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TNS market research data shows increasing investor dependence on financial advisors

Since 2009, investors have become increasingly dependent on financial advisors. According to TNS' Affluent Market Research Program, this marks a shift in mindset from the years before the Great Recession, when the trend was toward greater self-reliance. In 2014, 24% said they relied on an advisor to make most or all of their investment decisions, up from 17% in 2009.

The percentage of investors who said they make their own decisions without the help of an advisor is likewise down, from 33% in 2009 to 29% in 2014. The TNS Affluent Market Research Program is a market insights service for financial firms who serve the investments and banking needs of affluent individuals.  

The opportunity for financial planning.

Key Numbers

  • 33% of investors made all their own decisions in 2009
  • 29% of investors made all their own decisions in 2014

Investors generally are more dependent on advisors when they are older. But they establish durable, long-lasting relationships when they are young. Financial planning presents an opportunity to establish advice-oriented relationships early. The greatest unmet demand for financial planning is among investors under age 55. For example, whereas about 40% of adults age 18 to 34 have a financial plan, another 40% say they don't have a plan but are interested in getting one.

Competitor updates.

Fidelity Investments. Though it earns satisfaction scores in line with industry averages, Fidelity manages to achieve better than average client retention. A strong brand, supported by high advertising recall, supports Fidelity's positive competitive momentum.

Vanguard. Vanguard is achieving organic market share growth despite only average performance attracting new clients. Its momentum reflects exceptionally good client retention. The Vanguard brand is more highly regarded than any major investments brand in the industry, and is distinguished by its reputation for superior value, dependable service, and straightforward product offerings.

Edward Jones. Edward Jones has achieved impressive competitive momentum in recent years by attracting clients with more modest levels of assets and growing these relationships to higher levels of affluence. The company offers a superior client experience, earns high satisfaction scores, and is rewarded with superior client retention. Its physical distribution network and strong advisor relationships are keys to its success.

Wells Fargo Advisors. Among leading bank-affiliated providers, Wells Fargo has had the strongest organic growth in recent years. It is quite successful stealing advisor-dependent clients with substantial assets away from other providers, especially firms with full-service brokerage histories. Wells Fargo Advisors earns unremarkable overall satisfaction scores, and below-average marks for investment performance. But clients give high ratings to their advisors, who they perceive as easy to work with, and who make the effort to know them.

Scottrade. Superior client retention has yielded strong organic growth for Scottrade. Clients give the company high marks for its website and online investing tools, for its physical offices, and for good value.  

Source: Kantar TNS

Editor's Notes

TNS' Affluent Market Research Program examines how affluent households think about, shop for, and purchase financial services and evaluates the competitive effectiveness of specific providers of investment and banking services. Journalists, to speak with a TNS expert or obtain additional data, contact us. Follow us @Kantar and sign up for our alerts.

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