A new study by Spectrem Group shows that 58% of high-net-worth investors have switched financial advisors within their lifetime, and 23% have done so within the past five years.
Spectrem polled 3,070 affluent U.S. investors, of whom 1,015 had switched advisors. They ranged in age from millennials to those 69 years and older, and included mass affluent ($100,000 to $999,999), millionaire ($1 million to $4,999,999) and ultra-high-net-worth ($5 million to $25 million) investors.
The wealthiest participants in the study were most likely to have changed advisors in the last five years. Eleven percent of millennials had done so in the last 12 months.
Investors who had switched advisors gave many reasons for doing so, but three were predominant:
- 24% cited lack of proactive contact
- 23% said the advisor had not provided them with good ideas and advice
- 22% switched advisors because the old one was underperforming compared with the overall stock market
According to Spectrem, only 6% of affluent investors switched advisors because they did not like the firm their advisor was with, and 3% did so because the advisor’s firm had merged with another firm they did not like.
The study found that retired or semi-retired investors were likelier that those still working to switch advisors.
The same was the case for those who liked to self-educate, for example, by watching financial videos or reading investment-related articles, rather than discuss investments with an advisor.
Twenty-three percent of study participants who had switched advisors said they conducted weekly investment research, and 25% did so monthly. Those who had not switched advisors were less likely to conduct investment research weekly or monthly.