If you ask them three-fourths of Millionaires say they understand the concept of a fiduciary relationship, while 85 percent feel their financial advisor is a fiduciary. Age and wealth are factors in who among these Millionaires claims the best grasp of the subject, with the youngest Millionaire respondents under the age of 35 most likely to say they do not understand the concept of a fiduciary relationship (52 percent).
In its basic form, a fiduciary relationship states that a financial advisor acts always in the best interest of the client. Most investors believe they have a fiduciary relationship with their advisor, even though most financial advisors are not required by law or regulation to act as a fiduciary for their clients.
A majority of affluent investors expect return communication from their advisors within hours of delivering the message, either by phone or by email, according to Spectrem’s quarterly report on wealthy investors and their relationship with advisors.
Considering market volatility in the past month, it is not surprising that the highest percentage of Affluent investors surveyed in October by Spectrem Group report that “Stock Market Conditions” is the primary factor affecting their current investment plans.
Spectrem’s Wealth Segmentation Series report Advisor Relationships and Changing Advice Requirements details how investors use their advisors, as well as what they think about the advice they get, especially when it comes to product recommendations.
What would most compel a non-Millionaire investor to consider using a financial advisor? According to a new wealth level study conducted by Spectrem Group self-directed investors are most likely to seek professional personal finance advice in the case of a change in their financial situation.
More than investment track record, fees or commissions charged or referrals or recommendations, a financial advisor’s perceived honesty and trustworthiness are considered by wealthy investors to be the most important factor in selecting a new advisor. Which firms make the grade for America’s ultra-wealthy households?
At lower levels of personal wealth, the role of a financial advisor becomes problematic for an investor. Spectrem’s quarterly series of reports on wealth examines investors with a net worth between $100,000 and $1 million. Known as the Mass Affluent, these investors indicate that many do not use a financial advisor because they are uncertain whether they need to based on their level of wealth.
Advisor satisfaction among the wealthiest investors continues to be the highest. Spectrem’s quarterly research in its Wealth Segmentation Series – Relationships with Advisors – details the rise in satisfaction among all investors at all wealth levels, although there are significant statistical differences in the level of increase based primarily on age and level of wealth.
In Spectrem’s study of the wealthiest investors – 2014 $25 Million Plus investor – 45 percent of investors are investing in tax-free bonds in order to decrease their tax burden. Similarly, 45 percent are meeting, or have meetings scheduled, with tax attorneys or financial advisors to determine how best to attack and decrease their tax bill.
There are a host of national issues of concern to America’s wealthy ranging from the political environment and government gridlock to the national debt, the federal deficit and the prolonged economic downturn. So say America’s ultra-high net worth households, according to Spectrem Group’s wealth level research of homes with a net worth between $5 million and $24.9 million (not including primary residence)
The personal trust market is consolidating among the largest banks, according to data compiled from the FDIC for Spectrem’s 2014 Personal Trust Update.