What does Retail Investors Expect from Financial Advisors in 2024

A growing number of investors now look to their financial advisors for enhanced returns on their investment portfolios.

The PGIM Retirement Survey Report 2023, conducted by PGIM Mutual Fund, has shed light on the evolving expectations of investors towards their financial advisors. The report uncovers a significant trend: a majority of investors are now seeking better returns from their investment portfolios through advisory services.

Key expectations highlighted in the report include minimizing the risk of financial losses, assistance in building a diverse investment portfolio, and a reduction in the effort required to manage personal finances. The report emphasizes, “Enhanced returns from investments are now the top priority for those opting for advisory services. This is closely followed by the desire to ease the burden of managing personal finances.” Notably, the percentage of respondents who prefer to delegate their money management to reduce personal effort has surged from 24% in 2020 to 54% in 2023.

Further insights from the report reveal:

• A notable increase in mutual fund investments among those with retirement plans: from 14% in 2020 to 24% in 2023.
• A prevalent belief among 55% of respondents, especially those unprepared for retirement and millennials, is that maximizing returns is crucial for wealth accumulation.
• Financial advice sources vary, with 62% relying on insurance advisors, followed by Mutual Fund Distributors (15%) and registered financial advisors (10%).
• The percentage of individuals in the low-income bracket (Rs.20,000-Rs.50,000) with retirement plans has risen from 49% in 2020 to 67% in 2023.
• The average retirement corpus required post-employment has escalated from Rs.50 lakh in 2020 to Rs.73.44 lakh in 2022.
• Post-retirement concerns are predominantly inflation (56%), followed by health issues, cost of living, economic downturns, and lack of family support.
• 48% of respondents indicate a heightened focus on long-term financial commitments, such as medical emergencies and retirement planning, especially after the pandemic.

The survey was conducted with 3,009 Indian adults aged 26-60, including 80% men and 20% women, across 15 cities (60% in metros and 40% in Tier 1 cities).