Filed Under:Markets, Affluent

High net worth investors feel dissatisfied

Only 2 percent of high net worth investors say they plan to recommend their financial advisor to other investors.
Only 2 percent of high net worth investors say they plan to recommend their financial advisor to other investors.

More than three-quarters of high net worth investors say that they plan to take money away from their current financial advisors, according to a new report.

Tiburon Strategic Advisors, Tiburon, Calif., discloses this finding in Financial Advisor Winning Tactics: Defining the Nine Tactical Keys to Success.”

The report reveals that only 2 percent of high net worth investors say they plan to recommend their financial advisor to other investors. Nearly one in eight (12 percent) financial advisors say that clients are now more involved in the investment process.  And more three-quarters of financial advisors claim to have not lost clients and in some cases have even gained clients.

Among the report’s additional findings:

  • Over three-quarters of financial advisors believe that their financial advisor-client relationship has evolved into more of a coaching or educational role;
  • Financial advisors who focus on well-defined target markets report 2.4x-to-3.5x greater profitability per client;
  • Only one-third of financial advisors consistently implement workflow processes;
  • Only 41 percent of financial advisors document all major CRM processes;
  • One-third of financial advisors believe that technology will be the primary force that drives industry innovation
  • Baby boomers account for over 50 percent of full-service brokers’ clients, but it varies on an individual financial advisor level;
  • Assets held by consumers over 60 years old have nearly doubled since 2001 to $4.6 trillion in 2005;
  • Consumers households have $23 trillion in investable assets, an increase of over 40 percent since 2002, but a decrease of almost 20 percent since 2007;
  • Consumer household investable assets net flows have decreased to negative $516 billion, a decrease of almost $1.0 trillion since 2003;
  • Currently consumer assets that are being draw down for retirement are nearly $2 trillion which is expected to increase to $7.3 trillion by the time all baby boomers are retired in 2029;
  • Mutual funds’ consumer household penetration is 44 percent, down 12 percent from 2002’s penetration;
  • There are 290 open-end mutual fund assets under management are over $12 trillion, up 86 percent since 2002;
  • Open-end mutual funds’ $12.4 trillion assets under management includes $7.7 trillion in stock funds, $1.7 trillion in bond funds, and $2.9 trillion in money market funds;
  • Stock mutual funds assets under management have topped $7 trillion, up almost 100 percent since the 2000 peak;
  • Bond mutual funds assets under management growth has been steady, reaching $1.6 trillion in 2007, up 100% since 2000;
  • Consumer households have $3.8 trillion in traditional IRA accounts, an increase of 65 percent since 2002;
  • Consumer households have $219 billion in SEP & SAR-SEP IRA accounts, an increase of over 80 percent since 2002;
  • Consumer households have $178 billion in Roth IRA accounts, an increase of over 200 percent since 1998;
  • Consumer households have $51 billion in simple IRA accounts, an increase of over 1,000 percent since 1998;
  • Fee-only financial advisor clients are almost equally split between small and medium size business owners, corporate executives, and professional occupations.
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