Finding the right financial advisor is a daunting task for many affluent Americans. Most will use online resources in their search and to compare prospective advisors before hiring one, according to a new study from Wealthtender, a personal finance publication and financial professional discovery platform.
For its “Wealthtender Study of $100K+ Households Seeking Financial Advice,” the firm surveyed 500 U.S. adults who plan to hire an advisor within the next five years.
The survey found that although 62% of respondents started their search for an advisor with a referral from family or friends, 49% also sought referrals from other professionals. Nearly all planned to interview multiple advisors.
Ninety-six percent said they would conduct online research before deciding whom to hire: searching online directories, employing artificial intelligence, looking at social media and attending relevant online events.
Doing Their Homework
Those looking for an advisor are taking a multi-layered approach to their research, according to the survey, indicating how seriously they consider their hiring decision.
Ninety-seven percent of respondents said they would interview at least two advisors before hiring one. Only 3% said they would hire an advisor without looking for alternatives.
To decide whether an advisor is the right fit, 83% of respondents said they would research the advisor’s reputation by looking for online reviews and awards. Reviews can provide insights that can’t be gleaned from even the best marketing materials, Wealthtrender said.
Some three-quarters of survey participants said they would have an introductory call with a potential advisor and visit that advisor’s website.
Fifty-five percent said they also plan to seek second opinions from others who might know the advisors on their shortlist.
Key Criteria
Study participants want to work with a reputable advisor. The survey identified factors that indicate trustworthiness and competence to those looking to hire one:
- Transparency in fees and services — 73%
- Professional certifications/credentials — 63%
- Positive online reviews of an independent website — 61%
- Response time to inquiries or messages — 57%
- Professional and user-friendly website — 49%
Future of Financial Advice
The survey found that many people appear ready for AI to make their experience working with an advisor more efficient, accurate and comprehensive. But they still want a human professional to make the final calls about their financial future.
Although respondents said they expect to conduct most advisor meetings online, 42% said they plan to hire one who lives nearby, and 24% said they still prefer in-person meetings.
The survey found a nuanced but generally positive attitude toward advisors using AI tools. Respondents were most comfortable when AI enhances human capabilities rather than replaces human judgment.
Seventy-seven percent of respondents said they feel very or somewhat comfortable with AI monitoring their accounts for unusual activity to prevent fraud.
Seventy-four percent each were also comfortable with AI analyzing market data to inform investment decisions, drafting routine client communications and recording and transcribing meetings for note-taking and accuracy.
Less than half, however, were comfortable with AI making automated investment decisions absent direct human oversight.
At the lower end of respondents’ comfort zone, 64% said they were OK with AI producing personalized financial plans for retirement or budgeting.
The Initial Contact
Before contacting an advisor on their search list, respondents said the two things they want to know first are the advisor’s area of specialization and fee structure. They are also interested in what services are on offer and the advisor’s years of experience and credentials.
Even if they are contacting an advisor on someone’s recommendation, half of respondents said they want to read other clients’ reviews beforehand; in other words, online reputation has become an important criterion in the advisor selection process.
After initiating contact with an advisor, 48% of respondents said they would give them one to two days to respond.
A third expressed less patience, saying they expected a response within a day or within eight hours. Wealthtender said this reflects today’s connected world where prompt communication indicates professionalism and client service orientation.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.