Do Investors Choose The Firm Or The Advisor?


Relationships between investors and advisors tend to be very long-term.  In fact, Spectrem’s research indicates that the largest percentage of investors have been with their advisor for at least ten years and as age increases so does the average length of the relationship.  Spectrem has often generally found that when an investor is forced to choose between an advisor and a firm, those with longer relationships are somewhat more likely to choose the advisor over the firm.

But what about at the outset of the relationship?  How does an investor make a decision? Is he or she more likely to make a decision based upon the firm or the advisor?

Spectrem’s research indicates that 58% of investors initially choose their provider based upon the firm while 42% choose based upon the advisor.  This decision, however, differs significantly by age with younger investors more likely to choose an advisor based upon the firm rather than the advisor.


It’s interesting to note that occupation plays a role as well.  Professionals and Business Owners are more likely to choose based upon the advisor while Senior Corporate Executives and Managers, Educators, and Information Technology professionals are more likely to choose based upon the firm.

Spectrem also conducted focus groups with investors to explore their opinions regarding their selection process.  Below you can see some of the comments received during those interviews.


Overall, the decision made by the investor is based upon their experience.  For those who have had bad experiences with an advisor in the past or were worried about the strength of their institution during the 2008 market crash, they are more likely to choose a firm.  Those who are looking for a more trusting relationship tend to choose the individual.

Clearly successful financial providers and advisors need to demonstrate the expertise of both in order to be able to appeal to investors today.