Advisors Losing ‘Significant’ Ground With Wealthy Clients: Spectrem

George H. Walper Jr., Spectrem Group president, said in a statement that “advisors clearly are not moving the dial in the right direction when it comes to satisfying enough of their clients. Perhaps even more telling than satisfaction levels, more than one-quarter of affluent investors in all three wealth segments think they do a better job of investing than their advisors.” These findings, he said, “should be a wake-up call that advisors need to step up their game to attract and retain such important clients.”

Spectrem Group conducts monthly surveys with 1,500 wealthy investors on a variety of topics. Questions were taken from multiple months with affluent investors who qualified for the report.

In what amounts to another “lukewarm vote of confidence” by investors with $100,000 to $25 million in assets, just about half are likely to follow their advisors to a new investment firm, and those numbers are down from last year:

• 52% of ultrahigh-net-worth investors in 2012 compared with 60% in 2011
• 55% of millionaire investors in 2012 versus 61% in 2011
• 50% of mass affluent investors in 2012 compared with 59% in 2011

When asked about specific products and services, wealthy investors were generally satisfied with the frequency but less complimentary about the quality:

• Face to face meetings:  Just 51% of ultrahigh-net-worth, 54% of millionaire and 53% of mass affluent investors rated them excellent
• Financial plans: 44% of ultrahigh-net-worth, 45% of millionaire and 42% of mass affluent  investors rated them excellent
• Newsletters: 24% of ultrahigh-net-worth, 28% of millionaire and 22% of mass affluent investors rated them excellent

“Wealthy investors are relying less on advisors despite the fact that the majority are retired or approaching retirement,” Walper said. “To reverse this trend and develop loyalty, advisors need to demonstrate sophisticated, in-depth knowledge about taxes, financial planning and related issues while working more collaboratively with investors who may well have identified investing opportunities on their own.”