Stay or Go?



For a variety of reasons, financial advisors occasionally leave one financial provider to go work for another.

For a variety of reasons, clients of those financial advisors sometimes choose to take their accounts from the original financial provider and move them along with the advisor to the new firm.

Spectrem’s new study, Advisor Relationships and Loyalty: What Makes A Client Loyal?* asked investors who have a primary advisor whether they would stay with the financial provider if an advisor changes jobs or if they would move their accounts to wherever the advisor ended up.

The result among those investors with an advisor were nearly equally split: 51 percent said they would stay with the firm, while 49 percent said they would move with their advisor. In general, the longer the client had been with the advisor, the more likely they would be to move their accounts with the advisor.

From a loyalty standpoint, those investors who would move with their advisor have a higher opinion of the motivation of their advisor than those who would stick with the firm.

Investors in the study were asked if “financial advisors are more concerned with selling product than helping their clients”. It’s a fairly negative viewpoint of the motivation of advisors, and among investors who do not have a primary advisor, 65 percent agree with the statement. Among those investors who have an advisor, only 21 percent believe that to be true, which is still a fairly high percentage among investors who are paying their advisor for financial advice and guidance.

But the response to the prompt, when segmented by the “stay or go” question, was interesting. Among those investors who would stay with the firm if their advisor left, 26 percent agree with the prompt. Among those investors who would move their accounts to wherever their advisor ended up, only 16 percent agree.

It would be interesting to ask investors who think advisors are more interested in selling product why they think that, and to see if that attitude could be changed.



*This research is part of your Spectrem subscription.



©Spectrem 2020


Keywords: advisors, investors, Spectrem, Loyalty, motivation, selling