Data & Research May 16, 2007
HNW Market Offers Bountiful Adviser Opportunities
While many high-net-worth Americans vow to make financial planning decisions without the aid of an adviser, a growing number admit they’re relatively clueless about investing.
Reported by Fred Schneyer
That was a key conclusion reached by the latest annual wealth survey by Hartford, Connecticut-based insurer The Phoenix Companies, according to a news release. Conducted by Harris Interactive during February and March 2007, the poll included online interviews with more than 1,800 individuals with a net worth of $1 million or more, excluding their primary residences.
The Phoenix announcement said that 14% of respondents in the latest survey described themselves as knowing little or next to nothing about financial matters, double the 7% four years ago.
Despite the number of respondents who described themselves as naïve about financial matters, a third of respondents had no primary financial adviser while the number of the wealthiest consumers who receive advice from a full-service broker has dropped to 25% – the lowest figure in the history of the Phoenix survey.
At the same time, one in ten say they’re investing online or over the phone with a discount brokerage.
However, once advisers have established the client relationship with the high net worth individual, that relationship has tended to be relatively stable. Just 7% say they plan to look for a new adviser this year and another 10% are not sure if they will look for a new adviser.
The most common reason to switch advisers, according to Phoenix: 54% say it’s because the adviser isn’t proactive in maintaining contact. To the high net worth, that’s worse than producing less-than-expected investment returns (32%) or not being able to offer the right products and services (24%).
The survey also revealed that Gen-X millionaires, the fastest growing affluent demographic, are the most likely to test the financial services offered by banks. In fact, from college funding to asset allocation advice, estate planning to purchasing mutual funds, these respondents indicate that they are more ready than ever to consider a bank for their financial needs.
The executive summary of the Phoenix research is here.