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What are the most important factors when the affluent choose an advisor? |
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 What are the affluent looking for in an advisor? A well appointed office? Recommendations from friends and family? Perhaps ringside seats at the next heavyweight bout or season tickets to the opera, all courtesy of their advisor? Or maybe they just want someone who knows what they are doing; someone they can trust.
When asked what attributes they look for in an advisor the affluent investors surveyed promptly replied “Other”. This ambiguous finding perhaps points to reasons unique to each affluent investor concerning what they are looking for in an advisor. A close second was “Knowledge and Experience” as the attribute most important to them. When asked what would be important if they were forced to choose a new advisor over again, knowledge and experience was the unambiguous first choice. The second choice was “Integrity, Reputation and Honesty”. In contrast with the total investor population, the affluent report they are less concerned with integrity than their non-affluent counterparts. A recent study by Paladin found that “determining the trustworthiness of financial advisors and financial planners was the single biggest challenge facing 78.3% of consumers when they selected professionals to help them achieve their financial goals.”
The affluent are clearly placing a premium on knowledge and experience, perhaps trusting that their greater understanding of fees, fee structures, and the market in general will insulate them from any self-serving tendencies of an advisor. Considering how the Spectrem Millionaire and Affluent Investor Indices show consistently that the affluent population is almost always in step with the market and it’s trends, this is not a far-fetched assumption by any means; rather it is reasonable that an affluent investor might be better equipped to spot and deal with any compliance issues they see in their advisors.
The choice of “other” cannot be overlooked when assessing advisor traits. “Other” is clearly important to the affluent when choosing an advisor, but what might fall under that category? Personal grooming habits? Personality? Conversational tics and idiosyncrasies? The company’s logo? An attractive spokesperson? There are important attributes that differ across gender, age, and income levels, perhaps putting a finer point on what the magic formula is for the perfect advisor. For example: · Younger investors (those under age 50) are more likely than older investors to choose their advisors differently as they have more expectations of open architecture, demand more electronic communication, and have access, through the Internet, to more information. · Female investors want an advisor with a more personalized approach. · The oldest investors are looking for an advisor who will continue to guide their family after they pass away.Talking to your affluent clients and perspective clients about what is important to them will help improve the existing relationship and help establish a long lasting partnership. 
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High Net Worth Advisor Insights Newsletter April 2008
