Younger, Affluent Self-Directed Investors Are Warming Up to Working with Advisors

Core Insights - An annual investor study by JD Power indicates that 81% of self-directed investors under 40 prefer to invest independently, but 19% are "definitely likely" to seek financial advice, nearly double from the previous year [1][3] - There is a notable trend of increasing interest among younger affluent DIY investors in seeking professional advice, suggesting that firms that can attract these clients early will benefit [2] - The survey included responses from 4,335 self-directed investors and 7,982 advised investors, highlighting a significant shift in attitudes towards financial advisors among younger demographics [2] Self-Directed Investors - Among self-directed investors aged 40 or under with $250,000 or more in investable assets, 19% expressed a strong likelihood of working with an advisor within the next year, up from 10% in 2025 [3] - The likelihood of seeking an advisor is even higher among those with children, increasing to 24% from 15% in 2025 [3] Age Group Insights - The self-directed cohort aged 40 to 49 also showed increased interest in financial advisors, with 18% indicating interest in 2025 compared to just 6% in 2024 [4] - Market volatility may have influenced this increase in interest, although this was not explicitly captured in the survey [4] Market Conditions - The decline in consumer sentiment and increased market volatility during 2025, along with uncertainty around economic policy, may have prompted investors to reconsider their need for professional advice [5] - Firms aiming to attract younger clients should have advisors who can support them throughout their pre-retirement years, as noted by industry leaders [5] Client Engagement Strategies - To effectively onboard younger clients, firms should offer services that provide immediate value, such as estate planning, tax planning, and risk management, before transitioning them to full planning and investment management [6] - The average age of advisors in firms targeting younger clients is reportedly younger than the industry average, which may enhance their appeal to this demographic [6]