February 22, 2022 | Stamford, CT — Almost 40% of financial advisors in the U.S. think today’s growth in DIY investing will increase demand for their services in the long term. 
 
Although the increased use of self-directed trading accounts has raised questions about future demand for financial advisory services, more than two-thirds of the 670 advisors participating in a recent Coalition Greenwich study believe the DIY investment boom ultimately will have a neutral or positive effect on their business. Only a third of advisors think it will limit the demand for financial advice. 

“Robo-advisory software and portfolio construction tools can suggest asset allocations, but for people not working in the financial markets full time, deciphering what the data suggest can be complicated, scary and, in some cases, emotionally draining. Hence the continued need for financial advisors,” says Kevin McPartland, Head of Research in the Coalition Greenwich Market Structure and Technology group and author of Financial Advisors Questioned by Retail Investors on Inflation, Crypto, but not PFOF.

Crypto, ESG, Private Investments and the Technology Gap
To that end, financial advisors were sought out by their clients to better understand a variety of issues. In 2021, more than 80% of financial advisors discussed inflation expectations and U.S. tax policy with their clients. In addition, 65% of advisors were asked about cryptocurrencies, nearly half discussed ESG investments and a third discussed private company investments. Conversely, payment for order flow – the mechanism that has allowed for zero commission equity trading – was only a topic of client conversations with 8% of advisors.

WealthTech has played a large part in helping advisors keep up with those client demands.  Huge IT investments by wealth managers and an influx of new FinTech firms has left almost three-quarters of advisors feeling their technology is 
keeping up with those used by institutional investors—albeit barely. 

“Financial advisors increasingly feel that their technology is putting them on a more level playing field with institutional traders and investors, allowing them to compete for business based on the strength of their digital offerings as much as their track record,” says Kevin McPartland.