In what might seem like a statement of the obvious, a recent study by the Spectrem Group found that bad advice is the chief reason why financial advisors lose their clients. Roughly two-thirds (64%) of affluent investors who ditched their advisors within the past two years cited bad or biased financial advice as the reason.

    Faulty advice generally implies investment returns that underperform the benchmarks, says Tom Wynn, a director at Spectrem, a Chicago-based consulting and research company.

    The second leading reason for switching advisors is inadequate communication (51%), followed by a bad experience with advisors or their staff (39%) and advisors not being honest and upfront about their fees (36%).

    Other reasons cited for switching advisors include trouble with regulators and involvement with scandal (both 33%), firms failing to execute a transaction correctly (21%), and "other" reasons (23%). The catch-all "other" category can include advisor-client personality conflicts or a client who relocates and wants an advisor who's closer to home, says Wynn.