From Spectrem’s research Asset Allocation, Product Ownership and Perceptions of Providers, among Millionaire investors with a net worth between $1 million and $5 million, 70 percent of investors use a financial advisor to some extent, but a majority of those are Advisor-Assisted or Event-Driven, using advisors only for advice. Sixteen percent of Millionaires consider themselves Advisor-Dependent, described as “relying on an investment professional or advisor to make most or all investment decisions”.
Among Ultra High Net Worth investors with a net worth between $5 million and $25 million, 14 percent consider themselves Advisor-Dependent Investors, even though they have much more in investable assets than the Millionaire segment. Among Mass Affluent investors with a net worth between $100,000 and $1 million, only eleven percent consider themselves Advisor-Dependent, a sign that those with less are far more interested in directing their investments themselves.
Advisor-Dependent investors may have an investment plan in mind but want someone else to make it happen, or do not have the knowledge necessary to devise a plan and need an advisor to build an investment strategy based on the stated needs of the investor.
Spectrem Group has done several research studies on Advisor-Dependent Investors and found that in many cases their portfolios are less diverse, with a large amount of investable assets set in managed accounts and fixed annuities.
From Spectrem’s study Relationships with Advisors, Advisor-Dependent investors said they still control 13 percent of their own assets themselves, and 28 percent of assets are directed after receiving advice from an advisor, but that 59 percent of assets are completely handled by an advisor.
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