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February 14, 2014updated 04 Apr 2017 2:30pm

Banks seen as most stable providers: Spectrem

Banks again are considered to be the most stable type of financial provider by wealthy households, according to a Spectrem Group study.

By Verdict Staff

Banks again are considered to be the most stable type of financial provider by wealthy households, according to a Spectrem Group study.

After suffering a hit to their reputation following the market collapse of 2008, banks now top the list of stable financial providers among ultra-high-net-worth investors, those with a net worth between US$5 million and US$25 million. Seventy-four percent of investors indicated they considered banks to be a stable financial provider, an increase of 2% over last year’s percentage.

Full service brokers took a large leap from the previous year, going from 66 percent approval as a stable financial provider in 2012 to 73% in 2013.

Accounting firms also made gains in terms of reputation, going from 67% approval to 71% approval from 2012 to 2013. In 2009, accountants far exceeded other financial firms as being considered as Stable providers,

The two previous leaders in the category took slight dips. Private banks went from 73% approval to 72% and mutual fund companies dipped from 73% to 71%.

Stability is one characterization of financial providers. But some high net worth investors want their providers to offer innovative products and services and for that, more investors are turning to independent investment advisors (69%).

Sixty-eight percent look to independent financial planners or full service brokers for innovative products and services, and 67% look to investment management companies. In all cases, the percentages were marked increases from 2012.

Many high net worth investors frequently look for new ways to invest and new people to work with. Asked to name the type of firm they are likely to increase their usage of, 26% said they would have more involvement with independent financial providers, and 25% said they would increase usage with mutual fund companies.

Other types of businesses that could see 20% plus increases in usage are full service brokers (25%), independent investment advisors (24%), online brokerage firms (23%), law firms (22%), and accounting firms (22%).

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