While the majority of affluent advice seekers may prefer working with a single financial services provider for all their wealth needs, they're still open to exploring other options.
That's according to a new Cerulli report, titled U.S. Retail Investor Advice Relationships 2024, which found that 82 percent of well-heeled individuals seeking advice gravitate toward one provider, but aren't necessarily willing to pin their financial hopes on just one firm.
In a textbook display of inertia at work, 93 percent of advice seekers said they would consult their existing advisor before adding new products or services, though 41 percent said they'd consider moving at least some their assets to another provider within the next year. And while advice seekers may be overwhelmingly satisfied with their financial advisor, that doesn't mean those relationships will stay sticky.
"Despite high overall satisfaction levels—92 percent of Advice Seekers believe their financial advisor can solve their financial needs—this cohort is not yet committed,” Scott Smith, a director at Cerulli, said in a statement.
The report indicates that advice seekers, representing 17 percent of affluent investors, have an average relationship span of eight years with their providers. However, nearly half (46 percent) of these relationships are relatively new, lasting less than five years, though that's still 11 percentage points higher than other investor segments.
At least part of that movement could boil down to clients' evolving preferences and needs. According to Cerulli's research, 75 percent of advice seekers agree they need more advice compared to the past. Across all segments, they were also the most willing to pay for advice, and showed a preference for high advisor engagement.
For firms, Cerulli says the key to keeping advice seekers's business make sure their trusted advisors are armed with resources to showcase the quality of their offerings. And while there may not be a perfect in-house answer for every need, those that help clients take stock and recommend the best-fit solutions, whether proprietary or external, will benefit from having greater credibility.
“To retain these clients, advisors will need to dedicate themselves to understanding their circumstances and goals and offer solutions every step of the way in order to secure their trust – and assets,” Smith said.
Relationships are key to our business but advisors are often slow to engage in specific activities designed to foster them.
Whichever path you go down, act now while you're still in control.
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Survey findings from the Nationwide Retirement Institute offers pearls of planning wisdom from 60- to 65-year-olds, as well as insights into concerns.
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