Honesty and trustworthiness are qualities ranked No. 1 by Affluent investors in the process of choosing a new advisor, our wealth market research finds. But other considerations when selecting an advisor vary in priority based on age and net worth.
Next to perceived honesty and trustworthiness, Mass Affluent investors (with a net worth between $100,000 and $1 million, not including primary residence) overall next rank a strong referral from a trusted associate as the No. 1 factor they consider when choosing a new advisor (18 percent). Gen X investors in this wealth segment are the least likely to rank this the primary selection factor in comparison to other age groups.
Advisor Relationships and Changing Advice Requirements further finds that Mass Affluent Millennials are more likely than later generations to rank an advisor’s investment track record as the No. 1 selection criteria (20 percent vs. 10 percent of Gen Xers, and roughly 15 percent of Baby Boomers and seniors ages 65 and older).
Mass Affluent Gen Xers ages 36-44 that a prospective advisor is associated with a well-known brand or company (21 percent compared with 6 percent of Millennials, 9 percent of Baby Boomers and 13 percent of seniors) and the fees or commissions the advisor charges (18 percent).
In Millionaire households with a new worth between $1 million and $5 million (NIPR), honesty and trustworthiness again are the primary qualities these investors are looking for when choosing a new advisor. But Millionaire Millennials and individuals ages 45-54 are less likely than other age segments to rank this as their No. 1 consideration (roughly 21 percent vs. 37 percent of Gen Xers, 31 percent of Baby Boomers and one-third of seniors).
Millionaire Millennials are more likely than older Millionaires to rank fees or commissions charged as their primary advisor selection factor (17 percent vs 8 percent of Gen Xers and Baby Boomers and 10 percent of seniors). Likewise, an advisor’s investment track record is more important to them in selecting an advisor (17 percent) than is a strong referral (13 percent) website and online services (9 percent) and accessibility to products from a variety of different companies (9 percent).
Among Ultra High Net Worth investors with a net worth between $5 million and $25 million, Millennials put a higher importance on an advisor’s investment track record (25 percent) than they do his or her’s perceived honesty and trustworthiness (21 percent). UHNW Millennials, too are more likely than their elder cohorts to rank fees or commissions charged and an advisor’s association with a well-known brand or company (14 percent each) as the primary factor in selecting a new advisor.
UHNW Gen Xers are significantly more likely than other investors in this wealth segment to give primary consideration that an advisor comes with a strong referral (27 percent, compared with 11 percent of Millennials and 17 percent of Baby Boomers and seniors (17 percent each) as well as being offered products from a variety of different companies.