Client Affairs

Cerulli Identifies "Advice Opportunity Households" For US Financial Providers

Eliane Chavagnon, Editor - Family Wealth Report, December 9, 2013


Around a quarter of US households in which the inhabitants are aged 50-59 are an “advice opportunity,” defined in a new report as individuals that recognize the need for more financial and investment advice, as well as demonstrating a willingness to pay for such services.

Around a quarter of US
households occupied by individuals aged 50-59 are an
“advice opportunity,” defined in a new report as those that recognize their need for more
financial and investment advice, and who are willing to pay for it.

It should be noted, however, that at least 16 per cent of individuals in each younger age cohort also expressed the view that, essentially, costs are part of the relationship with financial providers. Interestingly, those aged 39 and under with less than $100,000 of investable assets are more likely to recognize this than many of their wealthier peers.

“While these investors fall out of the target market of many providers, new firms are emerging to assist these households,” Cerulli Associates said in its US Retail Investor Advice Relationships
2013: Sorting Out the Winners and Losers

LearnVest, for example, offers planning relationships with certified financial planners for an upfront expense of less than $300 and then a $19 monthly fee, the firm noted. “Addressing these non-traditional models will require providers to significantly rethink their service delivery models, but could potentially be rewarded over the long term as these investors mature into more appealing wealth management clients.”

The remarks come at a time when there remains debate
in the wealth management industry as to what is the “sweet spot” in terms of
the most profitable client segment, particularly as it is
sometimes claimed that ultra-wealthy clients can be an expensive customer base to serve.

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