5 Things Advisors Need to Know About the Evolving Investor

Every investor evolves, and every generation of investor evolves. Morningstar’s mission is empowering investor success, but to serve them, we need to challenge our assumptions and understand the evolving investor as they truly are, not as we’ve traditionally seen them.

Morningstar’s new Market Insights research group will provide the data-based, holistic perspective on investors that Morningstar has brought to investment research for decades. The group’s Voice of the Investor pilot study takes the pulse of U.S. investors in 2023, exploring their wide-ranging attitudes, behaviors, and preferences.

Study participants were recruited from a nationwide panel with strong representation across gender, geography, age, types of employment, ethnicity, household income, and investable assets.

The 2023 Voice of the Investor study addresses questions like:

• What’s the information landscape for today’s investors? How are investors responding?
• How do investors rate financial advisors compared to other sources of information?
• What investment strategies are most important to investors? How can financial advisors use these to show value?

The fundamentals of investing haven’t changed: investors are still interested in personalized financial planning, wealth management, and retirement planning. But as the demand for deeply personalized financial advice increases, financial advisors seek to build trust with clients who refuse to be categorized by generalities.

Advisors can lend their support at each moment in investor journeys, but like all successful relationships, mutual understanding comes from the willingness to listen first.

Here are five things we heard from the Evolving Investor.

1.) More information, more problems.

2.) Financial advisors promote peace of mind...but they have a PR issue.

3.) Addressing risk management adds important value.

4.) Helping investors take action amid market changes also adds value.

5.) Emerging asset classes are a new frontier, and investors are looking for a map.

While this study was U.S.-based, Joe Agostinelli, senior director of market research, sees potential to not only turn this into a recurring effort but expand it internationally, so that future iterations of the Voice of the Investor study can reflect voices from the U.K. to South Africa.

“The great thing about market research is that even if you answer the questions you have, new questions and new connections arise that you can then use to explore further,” Agostinelli said.

Over time, this research will provide rich insights on the longevity and impact of different trends—a barometer that advisors and home offices can use to inform their business strategies.

In the latter half of the year, the second pillar in Morningstar’s “Voice of” series will take shape: The Voice of the Advisor study.

“As we conduct research across the breadth of people and firms we serve, we’ll not only be able to study each independently but also identify gaps in their relationships with each other,” Agostinelli said. “Morningstar is in a unique position to help bridge any gaps that may exist.”

For advisors who want to meet the moment for the evolving investor, download 5 Things Advisors Need to Know About the Evolving Investor.