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Portfolio > ETFs > Broad Market

Wealthiest Americans Turn to FAs

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According to a recent survey, the nation’s wealthiest investors are increasingly embracing financial advisors for help with their investment decisions.

More than one-third, or 36 percent, of high-net-worth investors – defined as a net worth of between $5 million and $25 million, excluding primary residences – say that they are “advisor-assisted.” This represents an increase of 71 percent from 2006, when that number stood at 21 percent, says the latest Spectrem Group report.

At the same time, the number of ultra-high-net worth investors defining themselves as “self-directed” stands at 15 percent, down from 26 percent, two years ago. This represents a decline of 42 percent.

“In a highly complex market environment, ultra-high-net worth investors are increasingly seeking professional advice rather than going it alone,” says George H. Walper, Jr., president of Spectrem Group. “Having not fared well investing on a more self-directed basis during the last downturn, these wealthiest U.S. investors are less confident and proceeding with caution this time around. The number who regularly consult with advisors to navigate the financial markets has nearly doubled, while far fewer continue to make their investment decisions independently.”

Walper and Spectrem Managing Director Catherine S. McBreen have co-written the new book “Get Rich, Stay Rich, Pass It On: The Wealth-Accumulation Secrets of America’s Richest Families.”

Further underscoring this point, just 25 percent of HNW investors feel they can do a better job of financial planning than an advisor.

The Spectrem report, “Ultra High Net Worth Investor 2008,” is based on a survey conducted in June 2008 of more than 500 Ultra High Net Worth investors, defined as having a net worth between $5 million and $25 million, not including primary residence (NIPR). The data have a margin of error of plus or minus 4.3 percentage points.

Advisor-assisted investors are defined as those who regularly consult advisors but make most of the final decisions. Self-directed investors make most of their own decisions without the assistance of an advisor.

Spectrem Group is a strategic consulting firm specializing in the affluent and retirement markets.


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