Investors with a net worth under $1 million are not overwhelmingly satisfied with their financial advisors.
The relationship between an investor and a financial advisor is one that is built and expanded over time. It is not necessarily, however, a lifelong relationship.
Spectrem’s Wealth Segmentation Series report – Advisor Relationships and Changing Advice Requirements – asks investors what they would do if their primary advisor would move from one firm to another.
Among Mass Affluent investors with a net worth between $100,000 and $1 million, the split is even – half would go with their advisor to the new firm while half would stay with the firm and develop a new advisor relationship. However, when segmented by age, 54 percent of investors over 65 years of age would stay with their advisor, while 57 percent of younger investors under the age of 36 would stay with the original firm.
Age also plays a role in why investors would stay with the firm rather than move with their advisor. Asked their primary reason for staying with the firm, 64 percent of Mass Affluent investors said the safety and the brand name of the firm they are with is more important than the relationship with the advisor, while 28 percent said their primary reason for staying with the firm is that changing from one firm to another would be much of a hassle.
However, exactly 50 percent of investors under the age of 36 and 58 percent of investors between the ages of 36 and 45 said the hassle of changing accounts from one firm to another would prevent them from moving with their advisor.
A sure sign of investor satisfaction is if the investor recommends his advisor to another person, but that does not happen with a large percentage of Mass Affluent investors. Only 54 percent of MA investors have referred their advisor to others, although 57 percent said they would refer their advisor if asked.
Over two-thirds of Mass Affluent investors use advisors, but only 69 percent of those who use an advisor report overall satisfaction with their financial professional.
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.