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How Do Financial Advisors Help Millionaires?

Millionaires, a group of savvy and hands-on investors, say their advisors help them in several ways. Learn more.

| BY Adriana Reyneri

Millionaires tend to enjoy investing and prefer making their own financial decisions, but most seek professional advice on some aspect of wealth management, according to Millionaire Corner research on the relationships between affluent investors and their advisors.

How do advisors help Millionaire investors? More than half (56 percent) of Millionaires have worked with an advisor to create an investment plan. An equal share of Millionaires – individuals with $1 million to $5 million in investable assets – has received advice on diversifying assets away from a concentrated position, and on selecting individual stocks and bonds.

Close to half of Millionaires have worked with an advisor to create a retirement plan, or to manage their wealth to generate a cash flow, according to our study, conducted over the third quarter of 2012.  Millionaires also commonly work with advisors to create a written financial plan, or to devise strategies to minimize the tax consequences of their investment decisions.

These types of advice reflect the top priorities of Millionaire investors, who consider risk management, diversification and tax consequences to be the most important investment-selection criteria. On the other hand, Millionaires are unlikely to consult an advisor regarding credit, charitable endeavors, estate planning or long-term health care.

Reliance on financial professionals appears to increase with age, according to our advisor usage study. More than half of Millionaire investors ages 65 and older indicate they “rely on and trust my advisor for a vast majority of my financial needs,” compared to less than one-fourth of Millionaires younger than 45.

Older investors appear to place a higher premium on the “peace of mind” that can come from working with an advisor, according to our monthly survey for October. Three-fourths of the Millionaires participating in our monthly survey for October indicate working with an advisor “improves my knowledge of investing.” Close to two-thirds indicate an advisor provides them with a wider range of investment opportunities and more than 60 of Millionaires cite improved investment returns as an advantage of working with an advisor.



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