Eight-in-ten Ultra High Net Worth investors use a financial advisor in some capacity. In what situations are these elite investors most likely to consult one?
Advisor Relationships and Changing Advice Requirements, our wealth segment study of investors with a net worth between $5 million and $25 million (not including primary residence), finds that UHNW investors consult with a financial advisor concerning just over half of their assets, either just for advice before making the final investment decisions themselves (35 percent) or to completely handle with no input from them (18 percent).
Just over half (54 percent) rely and trust their advisor for the vast majority of their financial needs, while nearly four-in-ten (37 percent) rely on their advisor for specific types of investment such as real estate or alternative investments. One-fourth cedes a portion of their investments to an advisor to compare results of their own investing, and 22 percent .is transitioning more of their investments to a financial professional.
Roughly 30 percent report they are becoming more self-directed investors, meaning they are making more of the financial decisions without a financial advisor’s assistance.
According to Advisor Relationships and Changing Advice Requirements, UHNW investors ages 49-54 comprise the highest percentage of these wealthy investors who keep a portion of their investments with an advisor to compare results of their own investing (32 percent, vs 25 percent of those 48 years-old and younger, 25 percent of Baby Boomers and 22 percent of seniors ages 65 and up). This age demographic is also the most likely to indicate they are relying less on an advisor and making more of their own financial decisions (39 percent), and to turn to an advisor about specific types of investments (50 percent)
The decision by more self-directed UHNW investors to transition more of their assets to an advisor’s stewardship increases with age, from 8 percent of those 48 and under to 23 percent of seniors.
Trust in their advisor for the vast majority of their financial needs is most expressed by Baby Boomers (59 percent) and those ages 49-54 (57 percent).
Across the occupational spectrum, professionals, such as doctors and lawyers, comprise the highest percentage of UHNW investors who rely and trust their advisor for most of their financial and investment needs, while managers are more likely than professionals, senior corporate executives and business owners to keep a portion of their investments with an advisor as a benchmark to compare results of their investing.
UHNW investors consider gaining investment knowledge, having access to a wider range of investment opportunities and improving their investment returns to be the primary benefits of working with a financial advisor, our research finds.