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Over one quarter of affluent investors identify themselves as self-directed in their investment approach, meaning they do not consult with or utilize a financial professional. This sizeable group of investors creates a service opportunity for the financial service industry. Independent of advisors, these investors make their own plans for important financial events like saving for college, a child entering college and their own retirement. Perhaps they feel they are up on the latest trends, with their finger on the pulse of the financial world, reading the dailies, watching the performance of the market. Possibly they are exploring new investment vehicles, new stocks, and new ways of looking at the market, or are very comfortable with their current vehicles and strategies. Indeed, many affluent investors are savvy, learned and adroit at handling their fortunes. Others are perhaps struggling in denial of their lack of financial prowess, and don’t even realize it.
Despite all of this, only half of those investors who indentify themselves as self-directed report that they enjoy handling their own finances. On top of this finding, another 15% of self-directed affluent investors don’t feel that they have enough assets to attract the interest of a reputable advisor. They turn to an advisor only when events occur that might cause them to feel out of their depth.
So, what are the events that might send one of these independent laypeople to an advisor for help? Setting up a trust account, receiving help on lowering taxes and investing a large sum of money from an inheritance or retirement distribution are the primary reasons self-directed might consider using an advisor. These are the types of tasks that might be onerous to the group that doesn’t enjoy handling their own finances.
A positive experience with an advisor may convince them of the benefits and advantages of receiving continued and more regular professional help with their finances.
Another way to attract this hit and run advisee is to specialize; brand yourself as an expert in setting up trusts, in new technology stocks, in estate planning or tax planning, for example. By focusing on one aspect of this group’s one-off business, you may be able to attract investors who are looking for your specialty, and ultimately become the trusted advisor for investors who considered themselves self-directed in the past. There will always be self-directed investors, those who truly believe they know better than a trained professional, some more successful than others, but there are opportunities to use life events, investor misconceptions about their personal wealth, and complicated financial necessities to win some of the self-directed over to become advisor assisted. As an advisor, you know you shouldn’t try to be all things to all investors. Choose your specialty and brand yourself. 
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High Net Worth Advisor Insights Newsletter April 2008
