A majority of Affluent households consult a financial advisor in some capacity, whether it is for specific advice regarding asset allocation or a life event such as saving for retirement, or to make all of the financial and investment decisions.
The latest in Spectrem Group’s quarterly Wealth Market Reports examines Advisor Relationships and Changing Advice Requirements, the expectations investors have of their advisory relationship, the new types of information and planning they are seeking, and how to most effectively deliver this advice.
The trio of reports study three wealth segments. The Mass Affluent edition of this report surveyed non-Millionaire investors with a net worth of at least $100,000 (not including primary residence. (To preview this report, click here). The Millionaire edition is based on proprietary research based on responses from households with a net worth between $1 million and $5 million NIPR. (To preview this report, click here). The Ultra High Net Worth edition comprises responses from households with a net worth between $5 million and $25 million NIPR. (To preview this report and view an infographic, click here)
What is the most urgent on these Affluent households’ future to-do list when it comes to seeking financial advice? The highest percentage of Mass Affluent investors (at least three-in-ten) plan on consulting an advisor about establishing an estate plan and long-term care planning. Almost one-fourth (22 percent) indicate they plan to seek advice from their advisor about implementing tax-advantaged financial strategies. Seventeen percent plans to seek advice about creating a written financial plan.
Roughly one-fourth of surveyed Millionaire households indicate they are most likely to seek advice about establishing an estate plan, long-term care planning and establishing retirement income streams. They are more likely than their less wealthy counterparts to have already received this advice.
Also on Millionaire investors’ future to-do lists are implementing tax-advantaged strategies (16 percent), conducting an insurance audit to determine adequate or affordable coverage and creating a written financial plan (11 percent).
UHNW investors pretty much have these and other issues covered. They too, though, are most likely to indicate they will seek advice about long-term care planning (14 percent), establishing an estate plan (11 percent) and implementing tax-advantaged financial strategies (10 percent).
Across all wealth segments, Mass Affluent (55 percent) and UHNW investors (73 percent) are most likely to have received advice from their primary advisor or other about selecting individual stocks and bonds. The Mass Affluent, who are most likely to identify themselves as Self-Directed investors, meaning they make all of their own financial decisions, are the most likely to indicate they do not need this type of advice.
Fifty-five percent of Mass Affluent investors have also received advice about planning for retirement. Mass Affluent investors are generally younger than Millionaire and UHNW households and are less likely to indicate that they do not need this type of advice.
Almost two-thirds of Millionaires (64 percent) are most likely to have received advice from an advisor—whether primary or not—about diversifying assets away from a concentrated position. Just over six-in-ten have received advice about selecting individual stocks and bonds.
For Mass Affluent and Millionaire investors, the third type of financial advice they are most likely to have received is about implemented tax-advantaged financial strategies. For UHNW households, it is about establishing an estate plan.