SOURCE: Spectrem Group

October 10, 2012 07:00 ET

Wealthy Investors Give Lukewarm Ratings to Their Financial Advisors According to New Research From Spectrem Group

CHICAGO, IL--(Marketwire - Oct 10, 2012) - Despite a rising stock market which should be buoying investment performance and investor satisfaction, financial advisors are largely treading water with many wealthy investors, and worse, have lost significant ground with a key wealth segment, according to new research from Spectrem Group. Just 73% of Ultra High Net Worth investors, who have between $5 million and $25 million in net worth, not including their primary residence (NIPR,) say they are satisfied overall with their financial advisor, down from 80% in 2011 and 81% in 2010.

In comparison, 72% of Millionaire investors, with $1 million to $5 million in net worth, NIPR, are satisfied overall with their financial advisors, up slightly from 70% in 2011 and 2010. More Mass Affluent investors, with $100,000 to $1 million in net worth, NIPR, are satisfied overall with their advisors than in years past, but the number is still below the other wealth segments: 69% in 2012 versus 66% in 2011 and 61% in 2009, according to Spectrem Group.

"Advisors clearly are not moving the dial in the right direction when it comes to satisfying enough of their clients. Perhaps even more telling than satisfaction levels, more than one-quarter of affluent investors in all three wealth segments think they do a better job of investing than their advisors," says George H. Walper Jr., Spectrem Group president. "These findings should be a wake-up call that advisors need to step up their game to attract and retain such important clients."

In another lukewarm vote of confidence by investors with $100,000 to $25 million in assets, just half or so are likely to follow their advisers to a new investment firm, and those numbers are down from last year:

  • 52% of Ultra High Net Worth investors in 2012 compared to 60% in 2011
  • 55% of Millionaire investors in 2012 versus 61% in 2011
  • 50% of Mass Affluent investors in 2012 compared to 59% in 2011

When asked about specific products and services, wealthy investors were generally satisfied with the frequency but less complimentary about the quality:

  • Face to face meetings: Just 51% of Ultra High Net Worth, 54% of Millionaire, and 53% of Mass Affluent investors rated them excellent
  • Financial plans: 44% of Ultra High Net Worth, 45% of Millionaire, and 42% of Mass Affluent investors rated them excellent
  • Newsletters: 24% of Ultra High Net Worth, 28% of Millionaire, and 22% of Mass Affluent investors rated them excellent

"Wealthy investors are relying less on advisors despite the fact that the majority are retired or approaching retirement," notes Walper. "To reverse this trend and develop loyalty, advisors need to demonstrate sophisticated, in-depth knowledge about taxes, financial planning and related issues while working more collaboratively with investors who may well have identified investing opportunities on their own."

Additional wealthy investor insights are available on the Spectrem's, including:

Research methodology
Spectrem Group conducts monthly surveys with 1,500 wealthy investors on a variety of topics. Questions were taken from multiple months with affluent investors who qualified for this report.

About Spectrem Group
Spectrem Group is a strategic consulting firm specializing in the affluent and retirement markets, integrating proprietary research with expertise in building business, marketing and M&A strategies. Its professionals have held senior management positions at leading global companies.

About Spectrem's is a powerful source for up-to-the-minute news and information for investors, about investors designed to fuel financial growth. It incorporates Spectrem Group research as well as outside information. In the future, the site will offer financial advisor referrals.