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What ‘mass affluent’ investors want from advisors

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A recent survey conducted by HNW, Inc., a marketing and technology firm serving financial services institutions, aimed to ascertain what ‘mass affluent’ investors — those with liquid investable assets of between $100,000 and $1 million — want from their retail banks in terms of financial advisory services. The results, released yesterday at a press gathering in New York City, can be extrapolated to independent advisors trying to market to this growing segment.

Results were culled from a survey of more than 400 individuals in August of this year. HNW said the persons polled had at least $100,000 in liquid investable assets with some holding up to $3 million. The firm also maintains the mass affluent class is the fastest growing wealth segment in the country and currently accounts for one-third of all retail investment assets.

Here were some of the significant findings from “The Elephant in the Branch: Retail Banking and the Mass Affluent Opportunity”:

“What, me wealthy?” Stacey Haefele, president and CEO of HNW, said the mass affluent don’t consider themselves wealthy. “It’s a turnoff” to them, she said. “They don’t want to be identified with that group.” Indeed, the definition for rich and high net worth in the U.S. is steadily moving northward, she added. Rather, most in the mass affluent group consider themselves savers, and 45% say they are conservative investors.

“Give me more for my money.” A majority of the respondents said that whether they had $100 in the bank or $1 million, they would get the same level of service. In other words, the more they place in the bank, the more service they feel they should get. The challenge, therefore, for financial institutions is to entice these mass affluent investors to invest more money with them, yet provide services commensurate with their bank balances in a profitable manner, Haefele said. Simply waiving banking fees may not be enough, she added.

“Don’t push product.” Like clients everywhere, the mass affluent don’t want an advisor who is only interested in selling them products. Nearly half said that bank-based financial advisors only contact them “to sell or push something.” Said Leslie Paladin, senior vice president and managing director at HNW, “It’s not client-centric.”

“Advisor, you’re the one.” Not surprisingly, trust is a major factor when picking a financial advisor, the survey confirmed. Three in 10 respondents agreed that they “don’t trust using the investor advisor at my primary bank.” More than a third — 38% — characterized the relationship with their primary banks as an acquaintance, or “somebody I might acknowledge but not spend any real time with.” Haefele noted, however, that when there is a strong bond with an advisor, a client will be loyal to that person, not necessarily the institution the advisor works for.

Haefele said the research was undertaken by HNW, and not for any one banking institution. The results were not immediately broken down by age or gender.

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