Investors with at least $1 million in assets are confident in their advisors’ ability to help them meet their goals, even though they are not bullish in the overall market, according to two new companion studies conducted by Charles Schwab Advisor Services.
The first, the 11th semi-annual Independent Advisor Outlook Study, surveyed almost 900 RIAs representing $204 billion in assets under management. It found that 45% of independent advisors are bullish about the market in the six months. However, a second, first-time survey of 504 high-net-worth investors found that only 29% are bullish about the market.
On the plus side, only one third (32%) of high-net-worth investors believe it will be difficult for their advisors to meet their goals in the current market, and 25% feel it will be easy.
“What we are seeing is confidence is returning,” says Bernie Clark, executive vice president and head of Schwab Advisor Services. Clark indicated that he was happy to discover, in the new HNW survey – 96% composed of investors who are not Schwab customers – that clients have more confidence in their advisors than in the markets.
“This is where advice really takes center stage – providing perspective and expertise within the context of an individual client’s long-term goals, which is what many RIAs do so well,” Clark said in a statement.
An Opportunity for Women Advisors
For the first time, the advisor study asked RIAs about the role of women in client relationships. It uncovered a significant disconnect when it comes to serving HNW women which amounts to a big opportunity, according to Clark.
In North America, he explains, women represent 37% of the high net worth. In addition, about 42% of those women are self-made. “And only about 20% of these women use advisors,” Clark says. Furthermore, “the survey tells us that only half of advisory firms have a female advisor. Our advisors clearly need to mirror the market more.”
Roughly 90% of those women want holistic advice and not just advice on the performance of their portfolio, he adds.
More than half of advisors do not think it is important for their firm’s advisors to match the demographic profile of their clients, but more than one-third consider it somewhat important (31%), according to the survey. A scant 4% regard it as extremely important.
According to surveyed advisors, women are part of decision-making around finances nearly 60% of the time, either as the primary or sole decision-maker (21%) or as part of a couple making decisions jointly (38%).
With regard to meeting with individual members of a couple separately, 79 percent of advisors feel it is not important at all, 13 percent consider it somewhat important and 8 percent see it as extremely important.
Demand for Advice Continues to Surge
The survey also found that more than one-third (37%) of high-net-worth investors say their desire for investment advice during the past four years has increased. When asked what words first come to mind about working with a financial advisor, investors stated knowledge (71%), advice (59%), investment performance (49%), trust (48%) and service (47%).
“High net worth investors are looking for a lot more from advisors than just performance,” Clark said in the statement. “Advisors who provide unbiased advice and have rich, honest dialogues with their clients about individual investment goals and challenges in the context of the broader investing landscape are best positioned to capitalize on this continued trend towards advice and to successfully grow their practices.”
The full report can be accessed here: www.aboutschwab.com/press/research/advisor_research.
Register or login for access to this item and much more
All Financial Planning content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access