Young, Contented, But Fickle Investors

For the first time in years, investors at all wealth levels are reporting an increase in satisfaction with their advisers, according to “Relationships With Advisers,” Spectrem’s third-quarter wealth segmentation report. But younger and less wealthy investors are the least content—and the least loyal.

Adviser satisfaction and loyalty is highest among the wealthiest investors, Spectrem’s report found. Younger and less wealthy investors, on the other hand, are the least likely to stay with an adviser if he or she changed firms.

Spectrem’s Wealth Segmentation Series looks at investors from three wealth segments: Mass affluent (net worth of $100,000 to $1 million), millionaire ($1 million to $5 million), and ultra-high-net-worth ($5 million to $25 million). Categories do not include the investor’s primary residence.

Overall, adviser satisfaction is highest among ultra-high-net-worth investors at 80%, an increase of 7% over the 2013 satisfaction percentage.  Satisfaction among millionaires barely moved, from 72% to 73%, and rose from 69% to 72% among the mass affluent.

While in some cases the year-to-year improvement is slight, the overall satisfaction for the period 2009 to 2013 has gone up more than ten percentage points, from 61% to 72% percent among mass affluent investors, and from 72% to 80% among for ultra-high-net-worth investors. The wealthiest investors also report the greatest appreciation for adviser recommendations and advice over the past year, from 65% to 75%.

Key findings in the report include:

• Investors who rely on advisers want more information and more frequent communication. Investors have a variety of ways they want to receive communication (telephone, email, social media), and they want advisers to be flexible in their approach.
• Millionaires are working more with advisers than in the past, but want them to branch out into estate or long-term health care planning.
• Ultra-high-net-worth investors are looking for better information from their advisers through the presentation of high-quality content in newsletters or in blogs.
• Almost three quarters of mass affluent and millionaires use an adviser; even more for ultra-high-net-worth investors.

“You can expect investor satisfaction to be higher when the markets are doing well, and with the economy in a state of recovery,’’ said George H. Walper Jr., president of Spectrem Group. “But building loyalty with clients is the key to a long-term relationship.”

More information on Spectrem’s report, which includes insights on adviser satisfaction among wealthy investors and “Wealthy Investors to Financial Advisers: Information, Please!,” is available online.