Educating Millionaires: Filling in the Blanks
Go ahead, ask them.
Most wealthy investors will tell you they are knowledgable about finances, investments and the products they are invested in.
But in-depth conversations with investors can often indicate their level of knowledge is not what it should be in order to make the best decisions possible for their investment needs.
In Educating Millionaires, Spectrem actually tests the knowledge investors have regarding various investment products. Their knowledge (or lack thereof) is then compared to their perceived knowledge level as well as the actual investments they own. They are quizzed on their understanding of mutual funds, exchange-traded funds, hedge funds, annuities and other familiar products.
Unique to this report will be a look at how many wealthy investors admit they don’t know much about the products and services they are invested in.
The study also determines precisely how these investors educate themselves and how much they rely on their financial advisor for educating and understanding of investment products.
How does this study benefit advisors?
- Advisors need to know how investors are educating themselves on investment strategies. Are they getting a quality education, or listening to the wrong voices?
- What are an investor’s expectations of their advisor in terms of education? Do investors expect their advisors to serve as teachers as well as advisors? What products or services do investors most want to be educated about?
- Do investors want their advisor to assist in educating their children or grandchildren about sensible personal financial management?
- Dealing with a knowledgeable client is much different than dealing with one who does not know the basics, or the details, of investment strategy. Advisors need to be able to recognize which type of investor they are working with. What are the advantages of working with a knowledgeable client?
- Did investors receive financial educational material from their workplace?