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January 07, 2014 at 09:41 AM
A recent Cerulli report on retail investors finds that clients are working with an average of 3.6 financial professionals. That figure jumps to 4.2 and up for those with $500,000 or more in investable assets.
Plus, these average figures unexpectedly rose from 2012.
While this isn’t the news that researchers — and advisors — anticipated, the trend can be seen as an opportunity, rather than as simply a threat.
“Investors are looking at different ways to diversify not just their investments but also their [financial service] providers and where they hold their assets,” said senior analyst Roger Stamper of Boston-based Cerulli, in an interview with ThinkAdvisor on Tuesday.
One market segment that presents a good opportunity for advisors and other providers are investors ages 50 to 59, Stamper notes. In this group, close to 25% of investors are looking, or at least are open, to increasing their level of paid financial advice.
“That’s a sweet spot,” Stamper said. “And when you take into account the amount of rollovers, for instance, there is a significant amount of dollars at play.”
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Cerulli experts have thought many recent relationships between clients and financial professionals came about from “a short-term desire to validate or compare current providers, or even as a short-term spread of assets to maintain FDIC-insured accounts in the wake of bank failures.”
Instead, investors seem to be seeking “new and perhaps better advice, eschewing their incumbent providers,” the report explains.
“This particular market recession uncovered investors’ worst nightmares, which is the fear of losing everything,” it added.
