For investors looking for a financial advisor, the perception of trustworthiness is far more important than such cut-and-dry factors like investment track record or compensation, says a recent survey cited in Millionare Corner.
And the same goes for other professionals, such as attorneys and accountants, when they decide to refer an advisor to one of their clients, the website writes.
The perception of being honest and trustworthy was picked as the top criteria for selecting a financial advisor by 31% of millionaire investors, compared to 17% who said it was an advisor’s track record and 17% who said they rely on a good referral, according to a survey bySpectrem Group cited by Millionaire Corner.
Just 10% of millionaire investors said they picked their advisor primarily based on his or her association with an established brand, and 10% base their selection on the fees or commissions charged, according to the survey.
Trustworthiness is also what gets advisors referrals, according to the Spectrem survey, which included interviews with 25 estate-planning attorneys and 25 accountants who target families with more than $1 million in assets, Millionaire Corner writes.
These professionals consider referrals as a service to their clients, and therefore they say the advisor they recommend must be a good match, which normally requires a meeting and ends up being an ongoing recommendation, according to the web publication.
At the same time, a separate survey finds that ultra high net worth investors – those with at least $10 million in investable assets – have made it challenging for advisors to earn their trust, WealthManagement.com writes.
Out of the 400 advisors to UHNW clients polled by Wealth-X, in conjunction with Knight Frank, 92% feel like they’ve had to work harder to earn their clients’ trust over the past 10 years, the web publication writes.
In addition, 87% of advisors fee like their UHNW clients are increasingly involved in managing their own wealth, according to the poll.
The investors’ top concerns are inheritance, taxes and the global economy, according to the Wealth-X survey.
Fifty-six percent of advisors polled said succession and inheritance were top of the list of their clients’ concerns, followed by 50% who cited taxes and 47% who said it was the world economy, according to the web publication.