Bringing you live news and features since 2006 

Nearly 30% of US HNW investors define themselves as self-directed investors


Nearly 30% of high-net-worth investors in the United States define themselves as self-directed investors, according to Cerulli Associates’  High-Net-Worth and Ultra-High-Net-Worth Markets 2014: Addressing the Unique Needs of Wealthy Families report. 

In the report, Cerulli analyses the US high-net-worth (HNW) (investable assets greater than USD5 million) and ultra-high-net-worth (UHNW) (investable assets greater than USD20 million) marketplaces. The report focuses on the three constituencies of investors, providers, and asset managers.

"This helps explain the dispersion of assets among providers, and although the direct channel's surge in the high-net-worth marketshare gains have stemmed in more recent years, providers continue to boost their high-net-worth capabilities and presence among younger, tech-savvy wealth creators," says Donnie Ethier, associate director at Cerulli. "For wealth managers, they represent increasingly worthy competitors that will likely test traditional managers' willingness, and aptitude, to adapt to next-generation investors." 

The immense balances that many of these investors have within their self-directed accounts are further proof. This also helps explain where assets have flowed as investors have expanded their provider relationships. According to Cerulli's research, more than half of high-net-worth investors have direct or online trading account balances between USD500,000 and USD1 million.

"The self-directed model becomes less favourable relative to other advice models as assets increase," Ethier explains. "Logically, as assets increase, so does the complexity of portfolios, lending more credence to taking on an external advice sources and provider relationships. In addition to dealing with complex portfolios, advisors are an added expenditure, which can explain their lower use among retail clients."

"High-net-worth and ultra-high-net-worth clients that are using a self-directed model represent a significant opportunity for asset managers that pass due diligence screenings. In the end, direct providers are yet another avenue for external managers to reach the pool of high-net-worth assets," says Ethier.

Opportunities to capture additional wallet share of these investors certainly exists for wealth managers and their advisor forces, although they should know going in that many high-net-worth investors use direct accounts to test their own investment ideas, provide liquidity, and even to shelter assets from their primary advisors.

Latest News

BlackRock’s global ETP flows report for June finds a steady rise with USD128.1 billion added to global ETPs in June,..
Morningstar’s global ETF flows report for the first half of 2024 shows that actively managed ETFs have captured 25 per..
The surge in bitcoin ETF launches and funds flowing into the sector is transforming institutional investment in digital assets but..
LSEG Lipper’s latest research finds that the majority of actively managed funds and ETFs globally were not able to beat..

Related Articles

Chris Lo, Columbia Threadneedle
In a recent insight on India by Columbia Threadneedle Investments, the firm reports that the country’s economic reforms, which aim...
With an election on the horizon in the United States a group of ETFs is poised to capture investments on...
Robot worker
Qraft Technologies, based in South Korea, specialises in the use of AI in security selection and portfolio construction....
Andrea Busi, Directa SIM
Romain Thomas talks to Andrea Busi (pictured), CEO of Directa SIM, who explains why the online trading platform has just...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by