Investable Assets Hit $33.5 Trillion
As the total pool of investable assets expands, direct-to-consumer channels are seeing rapid growth. Total U.S. investable assets reached a record high $33.5 trillion at the end of 2013, up 11% from $29.2 trillion in 2012, according to a new report from Cerulli Associates.
Of the nation's investable assets, traditional advisory channels still hold the lion's share at $19.1 trillion compared to $4.6 trillion in direct-to-consumer channels. But when it comes to growth, direct channels far outpace the advisory channel with 14.1% compound annual growth over the last five years in direct channels compared to 9.5% for advisors. The Cerulli data breakdown does not include banking and other financial assets,
The speedy growth in these direct channels means that advisors will need to modify their practices to investors' demands, the report suggests.
To keep pace with evolving technology expected by investors, Cerulli's report urges advisors to adopt a "co-planning" method where they simultaneously work with clients using either a large-screen television or video chat. The report further emphasizes the importance of advisors offering "goals-based planning" that incorporates behavioral science rather than trying to beat a market benchmark.
In particular, Tom O'Shea, associate director at Cerulli, says financial education can play an important role, especially for younger investors. "While many households may not need comprehensive advice, they could benefit from simple financial guidance or even a basic investment management account to help shape them as young investors," O'Shea said in a statement. "Older households could benefit from investment services for which they would be unlikely to receive, based on their level of assets. These services could enhance future retirement income results."
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