In today’s world of information abundance, investors have a slew of options available when it comes to investment research. After weeding through the morass of information that is being produced on the economic crisis and Washington’s response, wealthy investors still need to have information about investments and trends in the market.

Whether you’re talking about examining financial statements or sorting through the plethora of analyst opinions, investors are limited only by the amount of time they’d like to devote to research, especially when inundated with reports from the regular press on the crisis. Just as consumers conduct research before purchasing a big ticket item, such as an automobile or a plasma television, investors conduct investment research in order to make informed decisions that will hopefully lead to higher returns.

Before the crisis, the proportion of affluent investors that own mutual funds, bonds, and stocks is high across the board, with stocks topping the list at 87%. But how important is investment research to the affluent investor? Overall, 73% “strongly agree” or “agree” that it’s important. Surprisingly, self-directed investors were least likely to state that investment research was important compared to other advisor dependency segments. Although advisor dependent investors take a hands-off approach to investing, they place a great deal of importance on the research that’s done on their behalf by their advisors.

Affluent investors aged 51-65 were most likely to state that investment research was important to them (78%). The contrast is particularly evident when compared to investors aged 66 and over (65%). Clearly, investors gravitate toward utilizing research when making investment decisions. Only 15% either “strongly agree” or “agree” that they use intuition to select investments when research is available. A large majority (73%) rely on investment research when making their investment decisions. Advisor dependent and advisor assisted investors were least likely to rely on intuition (82% and 79% respectively) compared to other investors.

The mode of delivery and content for investment research should be age appropriate for maximum utilization. As might be expected, younger investors are more likely to utilize technology. The likelihood of website usage increases significantly as age decreases. The same applies to podcasts, and to a lesser extent, blogs. Conversely, seminars appeal more to older investors. In addition to the mode of delivery, the content should be tailored appropriately. For example, younger investors will tend to have an asset accumulation mindset, and thus can take more risk, while the oldest investors might be looking for appropriate investments that will meet their retirement income needs.

Wealthy investors don’t have very large budgets when it comes to investment research. Forty-four percent (44%) spend no money at all on investment research. If the propensity to spend money on research isn’t there, investment providers should consider providing this as a complimentary value added service in order to develop goodwill and generate revenue from other sources in the client relationship that has been damaged by the trust issues created because of the economic crisis.

There is an opportunity to move event driven investors further along in the advisor dependency spectrum. Twenty-eight percent (28%) of the event driven investors surveyed state that they get confused as they conduct independent research. While this group of investors makes most of their own decisions, they require the help of an advisor for specialized needs. Often times, specialized needs services, such as estate and retirement planning, will require periodic monitoring and continued advisor contact. The way the wealthy research investments. 

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