High Net Worth Investors recognize that the market has dropped significantly and did not expect their advisor to overcome that challenge. That being said, overall satisfaction levels have dropped from 60% in the Spring of 2008 to 40% at the end of the year. In addition, investors are expected to reassess how their advisors are performing in the next twelve months.

While 65% were satisfied prior to the economic crisis, only 36% feel their advisor performed well during the crisis and only 38% feel their advisor was helpful. Older investors are the most critical of their advisor’s performance. Despite the economic crisis, only 14% of Millionaires say they will use a financial advisor more than they have in the past. The number of investors who are beginning to define themselves as Self-Directed is increasing while those who are dependent on an advisor (Advisor Dependent) are decreasing.

The number of investors who define themselves as Self-Directed has increased from one year ago while those who are Advisor Dependent have decreased. Advisor Assisted and Event Driven investors have remained nearly the same. Keep in mind that those who define themselves as Advisor Dependent feel they have suffered the largest economic losses. The crisis has developed even greater contempt for advisors among the Self-Directed. One quarter of these investors indicate they will use an advisor less in the future, even though their usage now is very low. Those who are Advisor Assisted and Advisor Dependent show greater usage in the future for their advisors, although even among these groups those planning to use advisors more is low. Those who are Advisor Dependent don’t plan to change the usage of their advisors very much.

During difficult economic times it becomes paramount for financial advisors to reach out to their clients. The contact is not necessarily to give them counsel or advice, but to reassure them, feel their pain and answer questions and concerns they may have. Most Millionaire investors have been contacted at least monthly by their advisors in the past 90 days, since the crisis began. Nearly 20% have been contacted weekly, while nearly one-third have been contacted either less than monthly or not at all. As the crisis continues, additional contact is desired by investors. Those in the oldest segment want more contact with their advisors than the youngest segment.

Financial providers and advisors must spend the next few years re-establishing trust with their clients. For some this will be easier than others. Overall, however, investors will be more vigilant and protective of their assets. Well-informed investors will set higher benchmarks for advisors and will retain tighter control over their own portfolios.

For More Information: Retain Your Clients During the Economic Crisis

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