Strategy
Self-Directed Channel Presents Opportunity, Not Threat To Advisors

Consumers want more control over their finances, leading to opportunities in the self-directed market for wealth management firms, according to a research report from Boston-based Aite Group.
Among the key findings of the report are that online brokers have gained a 3 per cent market share from full-service firms, and that financial advisors to high net worth investors estimate that around 25 per cent of their clients have a self-directed account as well as an advisor.
The report finds that the self-directed market, rather than posing a threat to advisor services, presents an opportunity for wealth managers and advisors to develop new offerings. Of the banks surveyed that don’t have a self-directed service at the moment, around half are planning to introduce one in the near future. Of the 400 advisors surveyed, 50 per cent said their firm doesn’t have a self-directed channel.
Meanwhile, as younger generations grow up accustomed to accessing and purchasing products and services online and offline, opportunities are being created for advisors and banks to meet their needs, the report claims.
"Over the next decade, we anticipate that wealth management firms will provide investors with several multi-channel offers to appeal to their growing demand for online access to information and tools. Firms that provide a self-directed investing solution will hold an advantage over those that do not, as they will be better positioned to capitalize on the latest consumer technologies and online investing innovations," said Alois Pirker, research director at Aite Group.