Many retirement savers and retirees with more modest wealth don’t think they have enough to afford financial advisors — an issue wealth managers are trying to address with digital offerings, according to a recent report.

While more than half of retirement investors with at least $500,000 in household investable assets tap financial professionals for retirement advice, that drops to just 21% for those with assets of less than $100,000, Cerulli Associates says.

Moreover, only a third of retirees say that financial professionals are their primary source of advice on retirement, according to the Cerulli report.

And close to a third of retirement investors with less than $250,000 in assets believe their wealth doesn’t justify hiring an advisor, Cerulli says.

The cost of financial advice is a major obstacle to investors hiring a professional advisor, according to the report. Around 93% of retirement investors see competitive pricing as at least somewhat important, Cerulli found.

Wealth managers have been trying to reach this client segment with digital advice offerings, which allows scaling across client accounts regardless of minimums, Shawn O’Brien, associate director at Cerulli, says in a statement. And some defined contribution managed account providers are trying to lure investors with hybrid platforms in the hope of eventually offering them more enhanced financial planning, according to O’Brien.

But financial advice firms should stress the advantages of dedicated financial advisors, Cerulli says.

“While purely digital advice solutions tend to be lower cost and more easily accessible, many retirement investors prefer the comfort of working with a human advisor when making significant, consequential financial decisions,” O’Brien said in the statement. “Human advisors are arguably better equipped to address the behavioral finance side of investing than are purely digital solutions.”

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