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Investors Increasingly Have More Than One Advisor: Hearts & Wallets

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About a third of investors added a new relationship with a financial services provider last year, according to a report from Hearts & Wallets.

The report found juggling multiple relationships is the norm for investors. Fifty-five percent of consumers with more than $500,000 in investable assets work with at least three firms, up from 49% the year before. Many of those consumers use a full-service firm and a self-service firm, although some work with multiple high-service firms “to obtain different advice perspectives,” according to a statement form Hearts & Wallets. Others use a combination of low-service firms for their Web tools.

Most firms had between 70% and 80% of their customers splitting assets between their company and at least one other retail firm or defined contribution provider.

Full-service firms had the most primary relationships, according to the report. They’re generally the most trusted; about half of respondents gave them a score of nine or 10 on a 1-10 scale for most trustworthy.

In spite of that, Hearts & Wallets noted that “contrary to popular belief, self-service has deeper reach among affluent and high-net-worth customers than full-service.” The report found three-quarters of households with at least $3 million and 70% of those with more than $500,000 use a self-service firm.

“It’s astonishing the self-service competitive set has deeper reach into investors with $500,000-plus, engaging more affluent investors than the full-service competitive set,” Laura Varas, Hearts & Wallets partner and co-founder, said in a statement.

She continued, “Asset managers should pay attention to the self-service model. Just as in retail stores, wealthy customers may trust and frequent a Bloomingdale’s, but they will still shop at Costco, too. Smart consumers compare.”

Fidelity had the largest market share, Hearts & Wallets found, with 10.9% of the retail market among households with under $5 million in assets.

Bank of America Merrill Lynch, including Merrill Edge, and Charles Schwab tied for second largest market share. Vanguard and Wells Fargo, including Wells Fargo Advisors, completed the top five.


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