Wealthy Investors Want Help Finding Advisors

Finding a money manager or hedge fund isn’t as easy as it once was, it appears–even for ultra-wealthy investors. These days, most “ultra-wealthy” families, 53%, according to a survey by the Institute for Private Investors (IPI), hire a consultant or advisor to help them find a new manager, up from 27% in 2007.

In fact, finding a “trusted advisor,” for a wealthy family is getting more and more complex, says Charlotte Beyer, founder and CEO of the IPI, which provides education and a collaborative forum for wealthy families. After the past two-plus years of market and economic crisis, the exposure of bad behavior on the part of some institutions, the proliferation of investments such as auction rate securities that left many investors without liquidity at the very least, and the Madoff and other scandals, investors realize that they need advisors they can trust, and they are, it seems, willing to pay someone to help find them. These consultants can take a family through the process of writing their request for proposal and interviewing and vetting prospective advisors.

Finding that “trusted advisor–that’s getting very complex,” notes Beyer. Families used to find their “trusted advisors” through friends or other referrals. “I’m not sure it’s always going to end well,” Beyer adds.