How the Up-and-Coming Wealthy Choose Advisors

Study finds ‘Futurewealthy’ switch wealth managers to find more value in relationship

A new survey of individuals on the fast track to wealth has found that 74% of respondents chose a new wealth manager on the basis of the firm’s reputation for quality of products and services, and 64% looked to the costs associated with those products and services.

Advisors wanting to attract these affluent people as clients need to understand that their character and fees are critical factors in the minds of affluent people when evaluating potential relationships, SEI, Scorpio Partnership and NPG Wealth Management said Wednesday in a statement on the release of the latest study in their ongoing Futurewealth Project.

The study surveyed 3,025 respondents globally with an average $2.9 million in net worth.

The survey revealed that up-and-coming wealthy individuals sought introductions and investigated potential wealth managers in a variety of ways.

Twenty-two percent of respondents asked for advice from friends or family before making a selection, while 15% researched the advisor market on their own.

The results also pointed to changing circumstances as a significant driver for why the Futurewealthy looked for new wealth management relationships.

Thirty percent said they wanted to diversify assets, 21% were in the market for a home and 20% wanted a promotion or a change in career.

The study found that the Futurewealthy typically work with three or four firms for advice regarding their personal investments. On average, 51% of respondents entrusted half of their investable wealth to a primary advisor.

At the same time, only 31% believed their primary wealth advisor had a solid understanding of their total financial picture.

“This study shows that the Futurewealthy are constantly searching for a more valued relationship and are open to the idea of switching primary advisors in order to attain it,” Kevin Crowe, head of solutions for SEI Advisor Network, said in the statement.

“That creates a strong opportunity for advisors to foster a personal connection with these wealthy individuals by getting to know them and their entire financial picture. Advisors who understand what it takes to capture the attention of the Futurewealthy are the ones who will successfully attract and engage long-lasting relationships.”

Although respondents reported that reputation and cost were the top factors in choosing a wealth manager, 17% said performance was the chief factor for deciding to stay with their primary wealth advisor.

Fifteen percent said they stayed because the advisor’s solutions and services met their needs, and 13% said they were happy with the advice provided.

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