Filed Under:Life Insurance, Life Planning Strategies

Affluent clients are engaging more advisors

The average number of provider relationships tops the average for 2008 through 2012.
The average number of provider relationships tops the average for 2008 through 2012.

High net worth investors are seeking advice from more financial advisors than in years past, according to new research.

Cerulli Associates discloses this finding in a report, “High Net Worth and Ultra High Net Worth Markets 2013: Understanding the Contradictory Demands of Multigenerational Wealth Management.” The sixth annual survey analyses the market size, structure and developments among the high net worth (those with investable assets greater than $5 million) and ultra-high net worth (more than $20 million) markets. The research also examines vehicle use, fees and services provided at family offices, wirehouses and private client groups.

The report pegs the average number of provider relationships among the high net worth at 4.4, a figure that tops the average for the years 2008 through 2012. Cerulli views this finding as a positive sign for advisors looking to gain a toehold or expand their presence in the high net worth market.

“For asset managers, Cerulli believes [the survey findings] should be viewed as encouraging since investors are dispersing assets across a wider breadth of wealth managers, platform and product sets,” the report states. “In addition, if HNW assets continue to flow to autonomous providers, including RIAs and family offices, opportunities increase exponentially since these firms truly rely on open architecture, without the common obstacle of proprietary funds presented by many legacy providers.

A large percentage of HNW providers (more than four in 10) endeavor to bring children of clients into discussions at the start of a planning engagement. Fewer of these providers (less than three in 10), ask clients and spouses to involve their children or hold wealth management informational sessions with children.

When asked why they view the high net worth market as more attractive than other business lines, a majority of asset managers flag investor sophistication, vehicles used and holding period. Fewer though still significant percentages of asset managers (up to four in 10) also point to customization, revenue-sharing, sales resources, price flexibility and length of sales cycle.

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Nichole Morford

Nichole Morford
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