While increasing numbers of high net worth investors are seeking professional financial advice, many say they are getting turned off by their advisor’s “lack of initiative,” according to the 10th annual Phoenix Wealth Survey released Monday. What’s more, retirement fears have mounted to their highest level in the study’s history (which dates back to 2000).
The study is a Harris Interactive poll of more than 1,700 people with $1 million or more in net worth (excluding their primary residence), who were polled in January and February.
According to survey results, the HNW are increasingly seeking financial advisors, but many expressed slipping satisfaction with them. Seventy-three percent said they are getting advice from a professional advisor compared with 67 percent last year, but the numbers are surprisingly low given the difficult times, says Walter H. Zultowski, Ph.D., senior vice president of Research and Concept Development at Phoenix.
Twenty-seven percent do not receive advice from any advisor – a decrease from 33 percent in 2008 – and more than a third do not have a primary financial advisor, down from 41 percent in 2008. Yet despite more wealthy investors actively seeking professional advice, 13 percent said they expect to find a new advisor in the next 12 months, up from 8 percent in 2008.
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More than a third said their advisors are not proactive in maintaining contact, an 11 percent leap from 2008. In response to the current conditions, nearly a quarter say they initiated contact with their advisor, compared with 27 percent who were contacted by their advisor. Most stunningly, according to Phoenix, 51 percent have had no contact with their advisor or don’t have an advisor.
Contact isn’t the only problem, however, according to the survey. Nearly one-third said their advisor doesn’t offer products or services they need. And the perception appears to be growing; The number of people saying their advisors don’t provide what they need has doubled over the past five years.
“These data suggest a missed opportunity for advisors,” said Dr. Zultowski. “The keys to successful client relationships in a negative wealth environment are maintaining contact and bringing them new, innovative solutions for their financial needs and concerns.”
Fears about retirement have peaked, with concerns running the gamut, from outliving assets (45 percent versus 36 percent in 2008) to having to modify their current lifestyle (44 percent versus 37 percent in 2008) to needing to replenish their retirement savings (34 percent versus 28 percent in 2008).
“Driving the anxiety are worries that poor investment performance will erode assets and inflation will diminish the value of their income,” said Dr. Zultowski. For example, 51 percent cited investment performance as a concern, a jump of 12 percentage points from 2008.
Gloom and doom outlook