The wealthiest investors are more likely than those less wealthy to use Full Service Brokers as their primary advisor.
As might be expected, there is a confidence level among extremely wealthy investors in regards to the investment portfolio.
According to the Spectrem report on the most affluent American investors, most of them make their own investment decisions and access financial advisors only when a special need arises.
The 2014 $25 Million Plus Investor report shows that 25 percent of investors with a net worth of at least $25 million make their own investment decisions entirely (and are labeled Self Directed investors), while 39 percent make most of their own decisions but use advisors when they are involved in specialized needs such as retirement planning or making alternative investments (labeled Event-Driven investors).
Twenty-six percent of the $25 Million Plus investors say they are Advisor-Assisted, which means they regularly consult with advisors on investment plans but make most of their own decisions. The final 10 percent say they are Advisor-Dependent, relying on an advisor to make most or all of their investment decisions.
(For comparison, 16 percent of Millionaire investors with a net worth between $1 million and $5 million say they are Advisor-Dependent.)
Virtually none of the respondents in the $25 Million Plus study operate financially without at least one advisor, but 43 percent say they employ only one. Only 27 percent have more than two financial advisors they work with.
Even among investors with multiple advisors, there is one considered their top firm, and 73 percent of all assets belonging to the $25 Million Plus investors is managed by the top firm.
The $25 Million Plus investors are more spread out in terms of the types of advisors they use. While 26 percent say their primary advisors is a full service broker, 16 percent say they use an independent financial planner and 13 percent use an accountant. Nine percent use an investment manager and 9 percent use a private banker.
In a Spectrem study of Ultra-High Net Worth investors with a net worth between $5 million and $25 million, 41 percent use a full service broker and far less are involved with the other types of advisors as their primary choice.
Kent McDill is a staff writer for Millionaire Corner. McDill spent 30 years as a sports writer, working for United Press International and the Daily Herald of Arlington Heights, Ill. From 1988-1999, he covered the Chicago Bulls for the Daily Herald, traveling with them every day through the nine-month season. He also covered the Bulls for UPI from 1985-88, and currently covers the team for www.nba.com. He has written two books on the Bulls, including the new title “100 Things Bulls Fans Should Know And Do Before They Die’, published by Triumph Books. In August 2013, his new book “100 Things Bears Fans Should Know And Do Before They Die” gets published.
In 2008, he resigned from the Herald and became a freelance writer. The Herald hired him to write business features and speeches for the Daily Herald Business Conferences and Awards presentations.
McDill also writes a monthly parenting column for the Herald’s Suburban Parent magazine.
McDill is the father of four children, and an active fan of soccer, Jimmy Buffett and all things Disney.