Are You the "Go To" Advisor?


The wealthiest investors in the U.S., those with more than $25 million of net worth, generally use a multitude of professionals and financial advisors to assist with the management of their assets.  Is it important to be the “go to” advisor or is it OK to be just one of many?  Spectrem recently completed research with investors with more than $25 million of net worth and found that it is important to be the “go to” advisor, but that doesn’t mean it isn’t beneficial to be one of many.

Spectrem asked wealthy investors what types of advisors they used to manage their assets and how many of these advisor types did they use?  As you can see below, wealthy households generally use multiple types of advisors as well as multiple advisors of each type.  Note that 50% use 4 or more financial planners, 40% use 4 or more RIAs and 48% use a similar number of independent investment managers.


The Independent Investment Advisors (RIAs) and Full-Service Brokers are generally identified by investors as the primary advisor with 18% identifying each type as such.  Note that in 2014, 23% identified the Full-Service Brokers as the primary advisor with 18% identifying Independent Financial Planners as their primary advisor.

Why is it important to be the primary advisor?  Wealthy investors claim to invest 44% of their assets entirely on their own without any professional help.  Another 29% of their assets are managed primarily on their own but they do consult with a professional advisor.  Only 29% of their assets are completely controlled by a financial advisor.

When asked the percentage of assets with each of the firms they use, wealthy investors indicate that they have 53% of their assets with their primary firm.  Twenty-two percent of their assets is allocated to the second firm, 13% to the third firm and 11% to all others.  Now, depending upon the amount of assets owned by an investor and his/her family, being the third or more firm may be very lucrative.  It’s clear, however, that being the primary advisor is preferable in all cases.


How can an advisor become the Primary Advisor? 


1.       Establish relationships when investors are young.  It’s never clear how successful any individual investor might be.  Longer term relationships are generally the strongest.

2.      Provide an expertise that the investor feels they need.  Whether it is a specific type of investment or just in-depth planning, by meeting the needs of the investor you will establish loyalty.

3.      Always listen and be aware of their individual situation.  Investors want to feel that their financial advisor really understands what is important to them.  Ask questions, take notes, and follow up on both investment and family issues.



While the super-wealthy will always use multiple financial advisors and professionals, become part of the inner circle will always be beneficial.