A six-year bull market led more investors to shun financial advisors and invest in the markets by themselves, a shift that looks likely to continue despite the recent market volatility.
Since 2011, more affluent investors have been using self-service financial firms such as Charles Schwab, E-Trade and Fidelity, according to a new analysis by retirement research firm Hearts & Wallets. And a growing segment of that group are combining self-service providers with full-service firms, such as Merrill Lynch, Edward Jones and independent financial advisors.
"We have been seen in the past that do-it-yourselfers seek out advisors when the market goes south," said Chris Brown, principal at Hearts & Wallets. Still, he expects the number of people using both self-service and full-service firms to continue growing this year.
"A market correction provides financial advisors an opportunity to persuade self-directed investors to give them a shot," he said. "But self-directed investors are less likely to close their accounts at discount brokerages. They will keep them as a hedge against their advisors."