Affluent Investors Prefer Independent Advice

March 5, 2001 ( - Participants may be gaining more access to advice, but those most satisfied with the advice, and likely to act on it, have opted for independence, according to a new study.

Today, over one-third of high net worth investors consider an independent, such as a Registered Investment Advisor or Certified Financial Planner, to be their primary financial advisor, equaling the number who use a full service broker. 

The Affluent Market Research Program – A Portrait of Wealth in America by the Spectrem Group also found that the use of professional advisors was growing, with 74% of households with more than $500,000 in net worth and/or incomes greater than $100,000 using a professional advisor, compared with just 61% two years ago.

Objectivity Valued
While the vast majority (89%) of those who use an independent advisor are satisfied with their advisor, less than three-quarters (73%) of those who chose a non-independent advisor (NIA) were.

In addition, those who use an independent advisor were generally much more satisfied with the choice on a variety of fronts, including:

  • 89% believed the advisor has my objective in mind, compared with 74% of those with an NIA
  • 85% believed their advisor was “worth the cost” (versus 70% with an NIA)
  • 73% said their advisor provides “superior investment performance” (versus 56% with an NIA)
  • 87% were satisfied with the qualify of advice (versus 75% with an NIA)
  • 80% “usually” act on the advisor’s recommendations (compared with just 55% of those with an NIA).

The survey’s authors suggest that investors are more interested in the name and reputation of the advisor than the brand name of the firm they work for.

While the investors in this group represent just 6% of total US households, they currently control nearly 60% of the country’s $18.6 trillion in investable assets.

– Nevin Adams