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Portfolio > Asset Managers

3 in 4 Investors Would Recommend Their Advisor: Study

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New research from Cerulli Associates and the Securities Industry and Financial Markets Association found that 78% of U.S. households with $100,000 to $1 million in assets use a professional advisor in some way. Most of them — 74% — said they would recommend their advisor, and 77% said their advisor was worth the cost. In fact, only 1% stated they were dissatisfied.

“It was shocking to us,” said Scott Smith, Cerulli’s director of advice relationships, on how few investors were unhappy with their advisors. He added that what differentiated advisors was  trustworthiness, dedicated relationships and personalized advice.

To widen the swath of U.S. households for the study, Cerulli looked at those who had investable assets of $100,000 to $1 million, or “everyday working Americans,” Smith said. That asset level represented 33 million U.S. households, or 26% of the U.S. population. This group also relied more heavily on the advice of their advisor than wealthier peers, the study noted.

Further, this group controlled more than $11 trillion in investable assets, over 23% of the U.S. total. The study included 401(k) advice providers in the mix.

Also, advisors shouldn’t fear automated advice taking over the business. In fact, 38% of investors said they would need more personalized financial planning advice in the future and lack of human interaction was a primary obstacle to digital relationships. Advisors should instead use automation for basic services to leave more time for personal interaction, the study advised.

Breaking It Down

The study also looked at how the $6.5 trillion in individual wealth that this segment of the population held in securities firms broke down:

These investors had 48 million relationships with securities firms, or just under 1.5 per household. The average account size was $135,309.

Of the total $28.6 trillion in investable assets, the biggest share was held on direct platforms such as Fidelity or Schwab: $7.1 trillion. Next largest was funds held by wirehouses: $6 trillion. independent RIAs held $2.6 trillion, IBDs held $2.5 trillion. Hybrid RIAs held $1.7 trillion.

A similar pattern was found of those with $100,000 to $1 million in investable assets: $2.2 trillion was held on direct platforms, $754 billion at wirehouses, $953 billion at IBDs, $568 billion at indie RIAs and $567 billion at hybrid RIAs.

Big Appeal

Although having an advisor that offered a full range of investment choices was most appealing to 49% of those surveyed, other important factors were having a dedicated advisor (48%), face-to-face meetings (45%) and comprehensive wealth planning services (32%).

Two of the most important goals of the this group of investors were to have an assured comfortable standard of living in retirement and protection of their current level of wealth.

In the study group, 31% of retirement income came from Social Security, while 23% came from 401(k)s, pension plans or other employer sponsored savings accounts. Fourteen percent came from IRAs while 8% came from annuities and 6% from stocks and bonds. The rest came from other sources.


Two-thirds of investors preferred human interaction with their financial professionals. But in terms of robo-advisors, the study found that the top five appeals to investors were: lower costs, ease of use, low minimum investment requirements, automated portfolio rebalancing and fully automated investment service (such as passive investing in ETFs).

The five main drawbacks of robos were: no human interaction, lack of personalized service, lack of trust in automated services, failure to take users’ complete financial picture into account and lack of capacity to handle complex finances.

On average, the number of services offered to investors in the target group was just under five. The most used service was viewing investing holdings and performance, followed by viewing tax information and viewing and updating a financial plan.

The online survey of 10,000 households was done in partnership with Phoenix Marketing International.

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