Every investor-advisor relationship is unique. Every investor comes into the professional arrangement with a different set of financial pressures and a different level of financial foundation. Some investors want an advisor fully engaged in their portfolio decisions; others are looking for an occasional tip to create portfolio security and growth.
But it behooves investors to discuss with their advisor the big picture issues which color their investment decisions throughout the year. Oddly, the percentage of investors who discuss their personal financial intentions with their advisor is only slightly above 50 percent.
A question posed to investors in Spectrem’s monthly survey of wealthy investors asked, “How much did your financial advisor assist you in setting personal financial goals?’ This refers to the initial process of determining what an investor wants to do with their personal fortune, including current financial needs and needs for the future. Among the 400-plus investors surveyed, the average response on a 100-point scale was 53.08, which is an indication there are investors who use their advisors for just that sort of information and there are those who do not.
Based on an occupational segmentation of investors, Senior Corporate Executives and Managers were more likely to turn to their advisor to help set financial goals, but not by a large margin (57.61 on that 100-point scale). Investors least likely to discuss financial plans with advisors were investors from the field of Information Technology, which as a group rated such conversations at 44.61.
It was also revealing that investors who consider themselves very knowledgeable were far less likely to address the question with their advisor, rated at 42.76, one of the lowest levels of any segment of investor answering the question.
So the first step is asking an advisor to help create a financial plan, which the above question sees a very average level of response. The second step is to have an advisor assist in meeting the financial goals that were set, and that response was a bit higher among all investors at 59.25.
This is an indication investors don’t think to ask their advisor to help create a plan, but will turn to the advisor to assist in reaching their goals.
And the reaction of those investors who consider themselves to be very knowledgeable is revealing. While they were much less likely to ask for help in creating the plan (that 42.76 number) they were much more likely to ask for help in reaching their goals (53.91).
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