Spectrem studies show that wealthier Americans are more likely to use a financial advisor than less-wealthy ones, which means the less wealthy investors might want to find an advisor.
Over 60% of Mass Affluent investors with a net worth between US$100,000 and US$1 million use an advisor of some sort for financial advice, according to a Spectrem Group study conducted in 2013.
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Full service brokers, financial planners and bankers are the most popular choices among the Mass Affluent investors.
Among those investors who use an advisor, 47% said they found their advisor through a referral from a friend or family member. Such referrals can shorten the vetting process, as the friends or family member can fill the investor in on important topics such as responsiveness to requests for information, investment success and risk tolerance.
Other ways investors found their advisors was being contacted by the advisor (9%), seminars or special events (7%), a general advertisement (6%) or by researching a certain product and finding the advisor who specializes in that product (6%)
Fifty-six percent of Mass Affluent investors say that an advisor is "very expensive” although the percentages drop based on age (the older the investor, the less likely they are to complain about the cost), the wealth and the regularity of advisor usage.
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By GlobalDataAmong the Mass Affluent investors, there was an even 50-50 split between those that would move with an advisor to a new firm if the advisor was changing jobs versus those that would stay with the firm because of its established history and the importance of the brand. In the case of those investors who stay with the firm, it would be best to go back to the interview process in order to find an advisor who fits their needs.
Spectrem Group has recently added a new feature to its Millionaire Corner website. It is called Best Advisors. The advisors in Best Advisors have been rated based upon an unsolicited satisfaction study conducted in the course of Spectrem research.
These ratings come from customers responding to Spectrem research. They are asked who their advisor is and then asked about their satisfaction. The advisors have no control over how they are ranked and, in most cases, are unaware that they have been ranked. This allows investors to honestly rank their advisor. At the same time it prevents competitors or non-customers from having the ability to rank a financial advisor.
