Over the long term, most affluent investors switch advisors at some point in their lives.
Financial providers and advisors almost always want to keep the clients they have while pursuing other new clients. But it turns out that few advisors manage to keep their clients forever, and switching advisors is something most affluent investors do at one time or another.
As it turns out, it is more than just making them money that keeps investors happy.
Spectrem’s Perspective Why Investors Switch Advisors looks at the types of investors who are most likely to switch advisors, and more importantly, what aspects of the advisor-investor relationship is most likely to trigger a desire to change.
Lifetime relationships between investors and advisors do happen, but a majority of the time, investors seek alternate advice. Only 42 percent of investors have never switched advisors. Among the oldest investors, those 69 years of age and older, 38 percent have never switched advisors.
It makes sense that an investor might switch advisors if the investments suggested by the advisor were not performing well related to how the stock market as a whole performs. But for many investors, there are far more personal reasons for switching advisors.
The study looks at more than a dozen reasons, including those related to fees, understanding risk tolerance, and returning phone calls or e-mails. Also included is a detailed look at the investors who switch advisors for a specific reason; for instance, those most likely to switch advisors due to under performance are usually older, wealthier, have significant assets in mutual funds and research investments in printed articles and on financial websites.
Overall, informed investors are more likely to switch advisors. Those that read financial articles or financial blogs are more likely to switch than those that do not, and the widest disparity is among those who visit major financial media websites such as CNBC and Fox Business.
Interestingly, investors who are more active on LinkedIn are less likely to have switched advisors. Twitter users are more likely to have switched, while there is little difference in the usage of Facebook or YouTube.
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.