This sizeable group represents 25% of all investors and will most likely be growing as a result of the economic crisis. More investors currently define themselves as Self-Directed than in the past. This is due to two primary reasons: lack of trust that a professional knows more than they do and the desire to avoid fees. Self-Directed investors also create a service opportunity for advisors.

Only half of those investors who indentify themselves as Self-Directed report that they enjoy handling their own finances. 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 investors 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 the Self-Directed indicate they might consider using an advisor. These are tasks requiring more in-depth knowledge.

These are also the types of tasks that might be especially onerous to the group that doesn’t enjoy handling their own 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. Other ways to attract these individuals may be through expertise in more complicated investments. There will always be Self-Directed investors, those who truly believe they know more than a trained professional. Some will be more successful than others.

There are, however, opportunities to use life events, investor challenges with their personal wealth, and complicated financial products to win some of the Self-Directed over to become satisfied clients. Choose your specialty and proactively market to this large percentage of investors.

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