The report states that direct investment platforms are competing among investors who maintain both direct and traditional advisory accounts.
Celluri’s research indicates that advisors underestimate the number of clients who maintain a direct account, with advisors reporting that only 20% of their clients maintain such accounts.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
Moreover, 76% of the respondents said that they owned direct accounts.
Direct platforms have become more competitive in the past decade by advancing their advice and guidance services.
At the basic level, direct investment platform representatives are trained to identify client needs, recommend an allocation, and help clients to populate their portfolios, with the next level offering managed account programs that provide ongoing investment management for an asset-based fee.
And at the highest level, private client services at direct providers offer investors a dedicated relationship, often with a certified financial planner.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData"For clients with between US$100,000 and US$2 million in investable assets, direct firms and advisors compete head-on for client relationships," remarked Cerulli associate director Katharine Wolf.
"Investors who do not want to pay for advice or who have not been approached by an advisor often default into the direct model, as direct firms generally have well-known brands and solid reputations," She further added.
Wolf also pointed out that direct firms are also competing for clients who have already sought out and retained a financial advisor.
Regarding the increasing competition, Scott Smith, associate director at Cerulli, opined that financial advisors still offer more robust services and can differentiate themselves by offering more personalized advice, including detailed financial planning.
