Schwab Study Shows Appetite for Advice on the Rise Among Affluent

  Schwab Study Shows Appetite for Advice on the Rise Among Affluent

Business Wire

SAN FRANCISCO -- June 26, 2013

According to a new study from Schwab, seven in 10 affluent investors feel
today’s financial markets are too complicated to navigate without an advisor.
One-third of study participants also say their desire for investment advice
has increased in the past year, and three-quarters say they are most confident
making investment decisions when they collaborate with their investment
professional; just one-third say they feel that same level of confidence when
making investment decisions by themselves.

Advice and the Affluent Investor: A Study of Attitudes and Behavior by Charles
Schwab (AAIS) surveyed more than 1,000 affluent Americans who receive some
form of professional financial advice. Seventy percent of those surveyed work
with a single advisor, and while on average their advisor handles 43 percent
of their assets, nine in 10 want to work with an advisor who looks at their
entire financial picture.

Trust and transparency are cornerstones of these relationships. Those surveyed
trust individuals in the financial services industry (72 percent) more than
financial services companies (42 percent), and 10 percent trust no one; an
overwhelming majority want transparency around how their advisor is
compensated for the advice they are providing (85 percent).

“Regardless of how much and how deep the advice, today’s affluent investors
have one thing in common: they want a trusted expert on their side looking at
the big picture on their behalf,” says Bernie Clark, executive vice president
and head of Schwab Advisor Services.

As of May 31, Schwab’s suite of advice offerings for retail investors has
grown to $139 billion assets under management from $114 billion the prior
year. Additionally, as of March 31, Schwab custodied $895 billion in client
assets for more than 7,000 independent Registered Investment Advisors (RIAs).

The study found that very few (11 percent) affluent investors see themselves
as advanced investors; most label themselves as an intermediate (68 percent)
and one in five (21 percent) describe themselves having beginner skills. Fully
half of respondents see investing as a chore, and not an activity they
particularly love or hate. Despite these tepid feelings, four in ten (41
percent) say they are much more involved in their investments in 2013 than
they were in 2012.

“These investors may lack the experience and appetite to fully tackle the
task-at-hand, but they absolutely understand that investing is a job that
needs to be done and they do not want to go it alone,” noted Clark, adding
that half of those studied use the word “comfortable” to describe how their
investment professional makes them feel about their financial future.

Advice Orientation: One Size Does Not Fit All

Study participants put themselves in one of two advice-seeking camps: those
who make all their own decisions even though theyreceive advice and guidance
from an investment professional (59 percent of respondents), and those who use
someone to make investment decisions for them without getting very involved
(38 percent). But the findings show that even within these two camps, affluent
advice-seekers are split on what they really want in these relationships:

  *54 percent of all respondents prefer to pick and choose specific areas for
    which they will pay for advice, while 46 percent prefer to pay one fee for
    advice that addresses their entire portfolio
  *52 percent want a solution that has worked successfully for other people
    like themselves, while 48 percent want an investment professional who
    provides a custom solution for their unique situations
  *53 percent want to work with an investment professional who makes changes
    to their portfolios when they are needed — based on the market and their
    needs — while 47 percent prefer someone who lets them know when they
    should consider making changes to their portfolio, along with the
    rationale for those changes
  *72 percent say they just want someone who can answer simple questions
    about investment choices, and a similar number (70 percent) say they want
    to have access to a team of professional advisors with expertise in taxes
    and legal issues such as trusts and wills

Positive Outlook with a Goal of Capital Preservation

Market optimism is prevalent among affluent investors who receive advice, with
more than six in ten (63 percent) believing that the S&P 500 will continue its
rise in the short-term. About that same number (65 percent) think their
portfolio will perform on par with the S&P in the next six months, and nearly
half (47 percent) think their investment goals will be easy for their advisors
to achieve.

The majority of affluent investors who receive advice primarily invest to
preserve capital (57 percent) rather than grow their assets (43 percent) and
the vast majority (81 percent) say creating retirement income to last the rest
of their lives is their primary investment goal.

Despite the overwhelming feelings of confidence, affluent investors are not
without some concerns. Among the issues they are discussing with their
advisors are market volatility, the interest rate environment, inflation and
tax increases.

About Schwab’s Advisory Solutions

Schwab’s suite of advisory programs, with $139 billion in total (as of May
2013), provides clients with ongoing investment support and portfolio
solutions including:

  *Schwab Advisor Network® – A referral to a local independent investment
    advisor who offers investment management for investors with more complex
    financial situations and specialized planning needs.
  *Schwab Private Client® – An ongoing private client relationship with
    dedicated representatives at Schwab and non-discretionary advice provided
    by Schwab Private Client Investment Advisory, Inc.
  *Windhaven Portfolios® – Broadly diversified strategies composed primarily
    of ETFs that strive to capture growth in rising markets while seeking to
    reduce exposure in declining ones.
  *ThomasPartners™ – A dividend income-focused money management strategy that
    provides a disciplined approach through diversified equity holdings based
    upon bottom- up fundamental analysis while remaining cognizant of overall
    exposure to specific asset categories or industries.
  *Schwab Managed Portfolios™ – Diversified portfolios of either mutual funds
    or ETFs designed for a range of investment strategies and managed by
    Charles Schwab Investment Advisory, Inc.
  *Managed Account Services – Specialized investment strategies for part or
    all of a portfolio, managed by professional asset managers.

About the Study

Advice and the Affluent Investor: A Study of Attitudes and Behavior (AAIS ) is
an online study conducted by Koski Research from April 24-May 1, 2013, among
1,016 Americans ages 25-75 with $250,000 or more in investable assets,
including retirement funds, who receive advice on some portion of their

About Charles Schwab

At Charles Schwab we believe in the power of investing to help individuals
create a better tomorrow. We have a history of challenging the status quo in
our industry, innovating in ways that benefit investors and the advisors and
employers who serve them, and championing our clients’ goals with passion and

More information is available at Follow us on Twitter,
Facebook, YouTube, LinkedIn and our Schwab Talk blog.


Through its operating subsidiaries, The Charles Schwab Corporation (NYSE:
SCHW) provides a full range of securities brokerage, banking, money management
and financial advisory services to individual investors and independent
investment advisors. Its broker-dealer subsidiary, Charles Schwab & Co., Inc.
(member SIPC,, and affiliates offer a complete range of
investment services and products including an extensive selection of mutual
funds; financial planning and investment advice; retirement plan and equity
compensation plan services; compliance and trade monitoring solutions;
referrals to independent fee-based investment advisors; and custodial,
operational and trading support for independent, fee-based investment advisors
through Schwab Advisor Services. Its banking subsidiary, Charles Schwab Bank
(member FDIC and an Equal Housing Lender), provides banking and lending
services and products. More information is available at and

Brokerage Products: Not FDIC Insured • No Bank Guarantee • May Lose Value

Schwab Advisor Network member advisors are independent and are not employees
or agents of Schwab.

Schwab Private Client, Windhaven Investment Management, Inc. and
ThomasPartners, Inc. are registered investment advisers and affiliates of
Charles Schwab & Co., Inc. "Schwab".

Portfolio management for Schwab Managed Portfolios is provided by Charles
Schwab Investment Advisory, Inc. ("CSIA"), an affiliate of Charles Schwab and
Co., Inc. ("Schwab").

Investing involves risk, including possible loss of principal.

Koski Research is unaffiliated with the Charles Schwab Corporation and its


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Charles Schwab
Alison Wertheim, 415-667-0475
Kate Clark, 212-704-4491
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