Why Do Investors Use Multiple Financial Advisors


Remember the old saying, “too many cooks spoil the broth?” Apparently, most investors feel the same way about financial advisors. Recent research conducted by Spectrem Group with investors who have $1,000,000 plus of investable assets found that while 75% of investors have only one financial advisor, roughly a quarter have two or more financial advisors. What leads investors to choose more than one advisor?

This chart highlights that those who use multiple advisors are more likely to be wealthier. More than half of these investors indicate they use multiple advisors to reach specific investment objectives. Almost 40% indicate that they prefer not to have all of their assets in one place. Almost 20% want to compare their advisors against each other.

In contrast, those who use only one financial advisor indicate they “trust my advisor completely” at 58% while 51% indicate they are pleased with their advisor’s investment performance. More than forty percent indicate that their financial advisor offers a full range of options while 20% think having multiple advisors would be a hassle.

When speaking with investors, whether they are prospects or clients, financial advisors should be cognizant of how many advisors an investor may have. For existing clients, many investors indicate they would consolidate assets if they were asked to move their assets by their primary financial advisor.

If an advisor specializes in a specific asset class, some investors will be willing to move assets to garner that specific expertise. Regardless of an advisor’s role, whether the advisor is the primary advisor or not, be aware of the investor’s total portfolio. That is the only way to ensure proper diversification of assets.

While most investors will use only one advisor, there are specific instances when they will choose multiple advisors.