Most financial professionals indicate they recommend opening a brokerage account in the very early stages of a client’s career. However, just 29% of clients follow through on this advice: Most clients choose to start a brokerage account further along in their careers, with 27% waiting until at least age 45.
The disconnect here most likely has to do with client priorities, says Bertrand. Brokerage accounts sit at the bottom of the list of savings priorities for most clients. When people are in the early stages of their careers, they may only be able to address higher-priority financial goals, such as paying down student debt or saving for retirement.
Similarly, well over half of clients wait until at least age 30 to start buying mutual funds and etfs—despite a sizable majority of financial professionals recommending clients purchase these investments in their 20s. One reason for that disconnect is the versatility that makes mutual funds and etfs attractive also makes for a dizzying array of choices. And minimum investment levels could mean even a client with some interest in certain products feels priced out of the market.
Financial professionals can overcome many of these issues by tying brokerage accounts more specifically to their clients’ plans. “Brokerage accounts and mutual funds become an easier conversation if you have clearly defined goals that you know somebody is trying to accomplish,” says Bertrand. “Then investments become a means to an end, tied to a plan.”
Having a specific plan in mind also helps guide conversations about selecting investments and taking advantage of programs that may be available for systematic investing. From the financial professional’s perspective, this process offers a solid entry point for more sophisticated investing down the line. Bertrand also notes that clients don’t necessarily have to fund their other priorities completely before they open a brokerage account. “There’s probably a subset of people who could do more even without maxing out their retirement contributions, but they won’t be persuaded unless you tie these actions directly to their financial goals,” he says.