As the impact of the financial crisis fades, a majority of ultra-high-net-worth investors are reporting increased satisfaction with their financial advisors, according to a survey released Monday.
A new survey by the Institute for Private Investors found 63% of its membership-ultra-high-net-worth investors with at least $50 million in investable assets-were "fully satisfied" with their advisor relationships. The New York-based IPI provides educational and networking resources to a national membership of 1,100 ultra-high-net-worth investors. The IPI also surveyed about 140 advisor firms.
The survey indicated that the satisfaction these investors expressed was the result of advisors paying more attention to their needs: 74% of investors said their advisor was responsive to their needs; 66% said the advisor had a "deep understanding of their family's goals;" 63% said their advisor spends sufficient time with them; and 59% said their advisor was proactive in meeting their needs.
The survey did reveal a trend toward advisor diversification, IPI said. While 69% of investors said they relied on a single primary advisor, 50% said they relied on one financial firm, and 19% said they used more than one firm as primary advisors.
The survey also indicated that ultra-high-net-worth investors felt their advisors were becoming more transparent about their business, and more willing to explain the basis of fees. Past surveys indicated investors had questioned whether advisors were acting in their best interests and were uncertain that advisors were providing the clearest explanation about their fee structure.
The new survey reported that 68% of investors agreed that their advisor has open, transparent and fair fees. This follows a 2010 survey in which 81% of these investors expressed trust that their advisor was acting in their best interest, IPI said.
The majority of ultra-high-net-worth investors, 63%, felt their advisor's results were in line with their family's financial goals and willingness to accept risk. But, 17% of investors disapproved of their advisor's performance.
Further, 65% of investors said their advisors fully utilized their firm's resources to the benefit of the investor's family; and 59% of investors were satisfied with the access to these resources their advisor provided.
Some lingering dissatisfaction was noted, however, as 24% of investors disagreed with both of these points. IPI noted this gap: 95% of advisors said their clients were fully satisfied with their relationship.
-Michael Daigle