According to a new report by Spectrum, “Relationships with Advisors”, the wealthier investor has stepped up use of financial advisors. The research breaks investors down by their wealth which includes: Mass Affluent, with a net worth of between $100,000 and $1 million Not Including Primary Residence (NIPR); Millionaire, with a net worth of between $1 million and $5 million NIPR and Ultra High Net Worth, with a net worth between $5 million and $25 million NIPR.
Advisor use itself is broken down into categories. “Self-directed” investors make their own investment decisions without the assistance of an advisor. Thirty-eight per cent of Mass Affluent falls into this category, probably put off by advisor fees. Only 23 per cent of UHNW investors consider themselves self-directed and 26 per cent of Millionaires. The next category is “advisor-assisted”. These are investors who regularly consult with an advisor for most investment needs, but make most of the final decisions themselves. “Advisor-dependent” investors rely on an advisor to make most or all investment decisions.
Fifty per cent of UHNW investors are either advisor-assisted or advisor dependent, compared to only 29 per cent of Mass Affluent investors who make frequent use of an advisor. Forty per cent of Millionaires are in one of the two advisor-heavy categories.
Spectrum’s research shows that the wealthier investors use advisors more frequently than less wealthy investors, with UHNW and Millionaire investors reporting very similar increases. Thirty-six per cent of UHNW investors and 35 per cent of Millionaire investors say they have worked more with a professional advisor in the past two years than previously, compared to only 25 per cent of Mass Affluent investors who say they have used an advisor more since 2011.
Source: Spectrum/Millionairecorner.com
