Investor-Advisor Communication: How and How Often?


Sometimes, all you need in life is knowing that someone cares, even if that “someone’’ is your financial advisor.

Investors monitor and judge their relationship with their financial advisor through many different lenses, and one of the most significant factors is the communication routine the investor has with his or her advisor. Our perspective Investors Switching Advisors explains that insufficient regular contact is one of the major reasons investors leave one professional and take their assets to another.

But how much contact is enough? And how should that contact be made?

Effective communication encompasses an entire chapter in our quarterly wealth segmentation series study Advisor Relationships and Changing Advice Requirements. The study looked at investors in three different wealth segments: Mass Affluent (with a net worth between $100,000 and $1 million), Millionaire (with a net worth between $1 million and $5 million) and Ultra High Net Worth (with a net worth between $5 million and $25 million).

“Many investors are very particular about how and how often they communicate with their financial advisor,’’ said Spectrem president George H. Walper Jr. “While there are some investors that do not require communication with their advisor, most want to know what is going on with their investments on a regular schedule, and are specific about what that schedule should be.”  

Among Millionaires, 40 percent receive regular contact from their advisor on a quarterly basis, and approximately 20 percent receive contact on either side of quarterly, either monthly or semi-annually. But there is a slightly higher desire among Millionaires for the frequent choices: 44 percent want quarterly contact and 24 percent want monthly communication.

(There are variations in terms of percentages for Mass Affluent and Ultra High Net Worth investors).

There are numerous ways in which advisors can communicate with their investor, and every day there seems to be new methods of communication.

The most preferred form of communication is face-to-face meetings (although younger investors report a growing interest in electronic communication). Sixty-eight percent of Millionaires report their face-to-face meetings with advisors are “excellent” with only 2 percent stating those meetings are “poor”.

By contrast, only 4 percent of Millionaires rate their advisor’s social media communication as “excellent” and 16 percent rate their newsletters as “excellent”. In fact, 54 percent of Millionaires rate their advisor’s social media contact as “poor” and 13 percent consider their newsletters to be “poor” as well.

Frequency is often the complaint when it comes to regular communication. Fifteen percent of Millionaires consider their advisor’s social media contact as “too little” while 11 percent have the same opinion about newsletter contact and face-to-face meetings.

Finally, investors have different opinions about what counts as “contact”. While a majority of investors want to speak directly to their personal financial advisor, some are satisfied to speak to someone from the provider’s office.

While 65 percent of Millionaires prefer to deal with only one person as their own financial advisor, 30 percent prefer to have a point person as well as a short list of additional office members they can turn to for support and information.

That being said, when an investor places a call to the advisor, 61 percent of investors say they would accept a response from someone representing the advisor, at least on the short term, while 39 percent want the advisor to respond directly.