Now that the market has been in a downturn for well over a year, affluent investors are looking to advisors for ways out of a rut, according to a survey commissioned by Nationwide Financial, Columbus, Ohio.
Wealthy investors are consulting a greater number of sources for financial advice than last year, the data indicates.
Respondents showed a strong preference for expertise when asked about factors they consider when selecting an advisor. They say that they want more security and are less willing to take risk.
A demonstrated track record of success remains the top factor, for 84% of those surveyed. A recommendation from a friend or colleague was considered a very or extremely important factor by only 58%, compared to 80% last year.
“Affluent investors are taking extra steps to ensure theyre dealing with the best advisors,” says Mathew Greenwald, president of Greenwald & Associates, the independent polling firm based in Washington, D.C., that conducted the third annual Nationwide survey.
“Even though a comprehensive financial plan was the second-most important service an advisor could provide [65% of advisors], these clients are now more interested in protection and security.”
Sixty-one percent of high-income investors surveyed this year said they are unwilling to take substantial financial risk for substantial gain, a 10% increase since last year.
Michael C. Butler, senior vice president of NFS Distributors Inc., says this is due to the longevity of the market downturn.
“People have lost confidence and are looking for guarantees [and] protection features,” he says.