SOURCE: Spectrem Group

October 15, 2009 08:00 ET

For the First Time, Mass Affluent Drop Brokers as Sole No. 1 Choice for Primary Advisor

Independent Financial Planners Now Tied With Full-Service Brokers; Mass Affluent Who Consider Themselves Conservative Investors Nearly Doubles

CHICAGO, IL--(Marketwire - October 15, 2009) - In 2009, for the first time ever, mass affluent investors have rejected full-service brokers as their sole top choice for primary advisor.

Mass affluent households in the U.S. using full-service brokers as their primary financial advisor fell to 22% in 2009, down from 30% the year before, according to a new report, "Mass Affluent Investor 2009," released today by Spectrem Group (www.spectrem.com). Mass affluent households are defined as having a net worth of $100,000 to $1 million, not including primary residence (NIPR).

At the same time, mass affluent investors using independent financial planners as their primary advisor rose to 22%, from 20% in 2008. Planners and brokers now share the rank of No. 1 advisor to the mass affluent, which had exclusively been held by brokers since Spectrem began tracking the data in 2001.

"In a year marked by recession and significant challenges for financial services firms, mass affluent investors have moved away from full-service brokers and increased their use of independent financial planners as primary financial advisors. For the very first time, brokers no longer rank as the sole No. 1 choice among the important mass affluent group. Whether linked to perceptions of financial institutions or a need to reassess their investing, this shift coincides with a strong move toward conservative investing by the mass affluent," said George H. Walper, Jr., president of Spectrem Group.

Indeed, 41% of mass affluent investors in 2009 described themselves as conservative in terms of investment risk, nearly double the 22% who considered themselves conservative a year earlier. Those considering themselves aggressive fell to 11% in 2009 from 29% a year ago.

The Spectrem report, "Mass Affluent Investor 2009," is based on the online polling of 1,498 households with $100,000 to $1 million of net worth (NIPR). Polling was conducted in July 2009. The data have a margin of error of plus or minus 2.5 percentage points.

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