For affluent investors, trust is the key factor in picking a financial advisor, Charles D. Goldman, an executive vice president of Charles Schwab & Co. Inc., told participants at the FPA annual meeting in Nashville.
Goldman, chief operating officer of the institutional unit of Schwab, San Francisco, said his company’s found trustworthiness scored 5 on a 5-point scale among advisor characteristics clients value most.
Next came competence, which scored 4.8, followed by quality of advice, at 4.7; planning for retirement goals, at 4.6; and performance, at 4.5.
Such factors are key to an investment advisor’s growth, Goldman said.
For their part, advisors are planning to grow moderately to aggressively over the next 5 years, Schwab found in another survey.
Among wealth managers, 70% of small firms (under $100 million of assets under management) planned to grow in terms of new assets for the next 5 years, while 80% of medium-sized firms ($100 million to $500 million) and 83% of larger firms (over $500 million) had plans for solid growth, Goldman said.
Among financial planners, 71% of small firms and 52% of medium firms had plans to grow (few large financial planning firms participated in the study).