Almost half of all wealthy investors do not talk to their advisor about long-term care plans.
Wealthy investors use their financial advisors for many different reasons. Planning for the future isn’t always one of them.
Spectrem’s Wealth Segmentation Series report Advisor Relationships and Changing Advice Requirements details the types of services advisors provide Ultra High Net Worth investors (with a net worth between $5 million and $25 million). For example, almost two-thirds of all UHNW investors have an investment plan with their advisor, and 65 percent also get help from advisors in selecting stocks and bonds.
When it comes to plans for their personal future, investors don’t always use their financial advisors to provide advice and assistance.
Only 37 percent of UHNW investors have worked with advisors on planning for long-term care. In fact, 47 percent of UHNW investors say they don’t need that type of advice, often because they believe their wealth with provide for them when long-term care is needed.
But 17 percent of investors say they plan to seek such advice from their advisor in the future. That includes 24 percent of investors aged 55-64 and 32 percent of investors aged 50-54. Among the youngest UHNW investors surveyed (those under the age of 50), 39 percent said they have received advice on long-term care from someone other than their primary advisor, perhaps from a health care insurance provider.
Sixty-three percent of investors have established an estate plan with their advisor, and 14 percent plan to seek that advice in the future. Sixty-three percent of UHNW investors have also talked to their advisor about tax-advantaged strategies with an eye toward retirement, with 12 percent planning to have that conversation with their advisor in the future.
There are other financial strategies a majority of UHNW investors have discussed with their advisors. Sixty-four percent have discussed diversifying assets, and 53 percent have discussed establishing a sufficient cash flow for liquidity needs.
However, one-third or less of UHNS investors have delved into these topics: alternative investments like hedge funds (33 percent), conducting an insurance audit (30 percent), exercising stock options (28 percent), and using family foundations and other philanthropic vehicles (25 percent).
A large majority of investors said some of the above-mentioned advice they simply don’t need. For instance, 69 percent don’t need advice on stock options, and 63 percent don’t need advice on insurance coverage. Sixty percent have no interest in talking about alternative investments with their advisor.
Thirty-eight percent of UHNW investors don’t need to discuss a written financial plan with their advisor, and 41 percent do not need advice on planning for retirement.
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.