Fidelity® Survey Finds Investor Confidence in Achieving Financial Goals Improves When Using Professional Money Management

  • Three quarters of investors have higher confidence in their professionally managed accounts than in their self-directed portfolios
  • Nearly 90 percent of investors - across generations and genders - believe that professional money management helps simplify investing
  • To help nervous investors who fear volatile markets, Fidelity introduces Defensive Strategy Preference in Fidelity® Portfolio Advisory Service to help mitigate risk

BOSTON--()--When it comes to investing: do it yourself or enlist a pro? That’s the question many investors ask themselves when determining how to achieve their financial goals. While many people successfully make their own investing decisions, a new Fidelity Investments® study surveying the experiences of those who selected professional money management found that three quarters (76 percent) have greater confidence in their managed account helping them achieve their financial goals. This reveals the satisfaction that’s derived from having a financial professional manage one’s finances. (Note: an infographic on key findings can be found here.)

The overwhelming majority of investors surveyed (89 percent) believe that using a managed account simplifies their investing, and cite the top three benefits of owning a managed account being:

  • Having confidence my portfolio is properly diversified (48 percent)
  • Being able to talk to a financial professional about my investments (40 percent)
  • Having confidence I’m on track to meet my investing goals (36 percent)

“Working with a professional money manager can benefit even the most seasoned investors by taking the emotion out of their financial decisions,” said Rich Compson, head of managed accounts at Fidelity. “We hear time and again from investors – particularly nervous ones – that a managed account has helped them stay properly allocated during stressful times when they otherwise would have overreacted, like in volatile markets.”

Compson continued, “You don’t have to have a complicated portfolio to reap the benefits of a managed solution – in fact, just 10 percent of survey respondents say their financial needs are very complex.”

When’s the Right Time to Invest in a Managed Account?

Fidelity’s survey examined triggers that prompted people to make the move from do-it-yourself investing to a professionally managed account. They cite “Lack of skill, will or time to manage my own investments” as the no. 1 reason (31 percent), followed by a desire for a financial professional to tell them what to do (23 percent) and a life event (22 percent). Investors of all ages report that a family member or friend (30 percent), a financial advisor (25 percent) or their company’s retirement plan (20 percent) introduced them to a managed account.

While on average respondents started investing around age 30, pivotal life events such as marriage (25 percent), change in job status (18 percent) or birth of a child (17 percent) often serve as the triggers. Managed accounts offer more than a point in time solution: 72 percent of baby boomers surveyed have invested in a managed account for more than twenty years.

Respondents on average hold 68 percent of their total investable assets in a managed account, with baby boomers reporting the highest average at 77 percent. Millennials hold 64 percent of their assets in a managed account compared to Gen Xers at 62 percent.

“Digital Investing”

While traditional managed accounts remain the most popular overall investment account among 7 out of 10 (69 percent) investors polled, one-in-four are embracing new technological advances by leveraging both a traditional managed account and a digitally-led “robo advisor” account. Six percent reported owning only a digital advisor account, a number that is expected to grow in the years ahead. For those investing with digital-advisors, the top three most important factors cited in their decision to “go digital” include: ease of use (50 percent), low cost (41 percent) and trust in the firm’s brand strength (36 percent).

“As technology permeates every part of our lives, new innovations, such as robo-advisors, have democratized managed accounts—providing greater access to professionally managed accounts at a lower cost,” added Compson. “Today, investors can select an investing option based on the degree to which they want control over their day-to-day investments and the complexity of their financial situation. This is the era of investor choice.”

Fidelity offers a range of advisory solutions through Fidelity’s Portfolio Advisory Services (PAS), which includes active asset allocation, tax sensitive investing1 and separately managed accounts – with more than $240 billion in assets under management2. In 2016, Fidelity introduced a digital advisory solution, Fidelity Go, and the PAS Index-Focused Preference, and last month introduced the PAS Defensive Strategy Preference, designed to help buffer against market lows and highs in an effort to provide a consistent experience for investors over the long term. This is a key concern for 31 percent of the survey respondents who opened a managed account because of either recent market volatility or being nervous to invest on their own because of the financial crisis in 2008.

Investors interested in learning more can explore Fidelity’s range of managed account solutions. Investors might also find the Fidelity Viewpoint, “Three keys: the foundations of investing,” useful when thinking about how to build an investment plan they can stick with. Investors intimidated by investing can read some tips in the Fidelity Viewpoint, “Go from saver to investor.”

About the Fidelity Managed Accounts Survey
This report presents the findings of an online survey conducted from October 24-31, 2016 among a sample of 400 respondents ages 25 and older who have $5,000 or more in a managed account. The sample for the study came from an online panel and data was collected by ORC International, an independent research firm.

About Fidelity Investments
Fidelity’s mission is to inspire better futures and deliver better outcomes for the customers and businesses we serve. With assets under administration of $6.1 trillion, including managed assets of $2.2 trillion as of April 30, 2017, we focus on meeting the unique needs of a diverse set of customers: helping more than 26 million people invest their own life savings, 23,000 businesses manage employee benefit programs, as well as providing more than 12,500 financial advisory firms with investment and technology solutions to invest their own clients’ money. Privately held for 70 years, Fidelity employs 45,000 associates who are focused on the long-term success of our customers. For more information about Fidelity Investments, visit https://www.fidelity.com/about.

Investing involves risk including the risk of loss.

Diversification and asset allocation do not ensure a profit or guarantee against loss.

Fidelity Portfolio Advisory Service®, Fidelity® Strategic Disciplines, Fidelity® Wealth Management AdvisorySM, and BlackRock® Diversified Income Portfolio are services provided by Strategic Advisers, Inc., a registered investment adviser and a Fidelity Investments company. Fidelity® Strategic Disciplines includes the Breckinridge Intermediate Municipal Separately Managed Account, the Fidelity® Equity-Income Strategy, and the Fidelity® Tax-Managed U.S. Equity Index Strategy. Fidelity Go® is a service provided by Strategic Advisers, Inc., and by Geode Capital Management, LLC, an unaffiliated registered investment adviser. Fidelity® Personalized Portfolios may be offered through Strategic Advisers, Inc., or Fidelity Personal Trust Company, FSB (FPTC), a federal savings bank. Nondeposit investment products and trust services offered through FPTC and its affiliates are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency, are not obligations of any bank, and are subject to risk, including possible loss of principal. These advisory services are provided for a fee.

Brokerage services are provided by Fidelity Brokerage Services LLC. Custody and other services are provided by National Financial Services LLC. Both are Fidelity Investments companies and members of NYSE and SIPC.

Fidelity Investments, Fidelity, Fidelity Viewpoints, Fidelity Go and the Pyramid Design logo are registered service marks of FMR LLC.

Fidelity is not affiliated with any third parties named herein.

Fidelity Brokerage Services LLC, Member NYSE, SIPC
900 Salem Street, Smithfield, RI 02917

795630.1.0
© 2017 FMR LLC. All rights reserved.

1 Fidelity® Personalized Portfolios apply tax-sensitive investment management techniques (including tax-loss harvesting) on a limited basis, at their discretion, primarily with respect to determining when assets in a client’s account should be bought or sold. With this discretionary investment management service, any assets contributed to an investor’s account that Fidelity® Personalized Portfolios do not elect to retain may be sold at any time after contribution. An investor may have a gain or loss when assets are sold.

2 Internal business data as April 30, 2017

Contacts

Fidelity Investments
Follow us on Twitter @FidelityNews
or
Robert Beauregard, 401-292-7440
Robert.Beauregard@fmr.com
or
Joseph Madden, 401-292-6330
Joseph.Madden@fmr.com

Release Summary

Fidelity announces the results of its Managed Accounts Value survey. The survey reports what clients in traditional managed accounts and/or robo advisors say are the main benefits of such accounts.

Contacts

Fidelity Investments
Follow us on Twitter @FidelityNews
or
Robert Beauregard, 401-292-7440
Robert.Beauregard@fmr.com
or
Joseph Madden, 401-292-6330
Joseph.Madden@fmr.com