You: The Key to Better Investment Returns…and More

Sue BerginSue Bergin

John Hancock’s recent Investor Sentiment Survey demonstrates that over half of investors who use an advisor are confident (56%) that doing so will lead to better investment returns.[1]

How’s that for a confidence boost?

The study also gives us tremendous insights into why clients choose to work with financial advisors and highlights the importance of three factors:

  1. Realistic assessment of one’s own investment management capabilities
  2. Confidence in advisors’ ability to generate better returns than the individual could do themselves and add value to the process
  3. Time constraints

A significant number of participants who work with advisors (47%) do so to obtain a comprehensive financial plan and for validation that their financial decisions are on track.   They tend a need to have a professional’s stamp of approval on their decisions.  This is a moderate showing of confidence in his or her own ability and reveals a willingness to seek and listen to advice.

You Are The Key37% of those working with advisors claim to do so because they lack the knowledge to manage their own investments.  43% of the respondents who do not have an advisor chose to go at it alone because they feel like they can manage comfortably on their own.

36% of the “do-it-yourself” group said that they did not think advisors provided good value for their money.

Working with An Advisor

No Advisor

56% believe working with an advisor will lead to better investment returns 43% have confidence in their own abilities and therefore do not need to work with an advisor
47% seek comprehensive financial planning advice and to validate financial decisions 40% actually enjoy the process
36% acknowledge they couldn’t manage investments on their own 36% lack confidence in advisors
24% don’t have the time

Few people think they could perform surgery on their own knee, but many investors believe they could get comparable results without a professional’s assistance. Technological innovations are only going to fuel that sentiment by making it easier and more fun than ever for the do-it-yourselfers.  The key for advisors is to focus on your unique qualification and the value you add to the relationship.

Instill confidence in your abilities, so theirs are never even considered.


[1] John Hancock Investor Sentiment Survey, January 7, 2013

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