Clients not overly impressed by their advisers in 2012: Survey

Substantial percentage said financial advisers didn't earn their keep during the year; keep it simple

Dec 13, 2012 @ 3:35 pm

By Jason Kephart

First, the good news: The majority of investors feel that their financial adviser has provided value over the past year. The bad news? It's not that big of a majority.

Only 57% of investors said their advisers proved their worth over recent market conditions, according to a Fidelity Investments survey released today. Indeed, fully 43% of the 711 respondents said they feel that their adviser did not earn his or her keep in 2012.

Those who were more complimentary cited several contributions made by advisers. At the top of the list: Creating a long-term investment strategy. These clients also cited their adviser's holistic planning services and use of technology, which made for better communication.

“Advisers that help clients think about the broader spectrum of their lives and the bigger pictures were really seen as stellar,” said Ross Ozer, senior vice president of Fidelity Institutional Wealth Services.

Not surprisingly, investors who are pleased with their advisers are much better clients than investors who are less impressed, according to the survey.

Two-thirds of investors who feel that their advisers proved their worth said they would stay with the adviser if he or she switched firms. That percentage dropped dramatically — down to just 33% — for respondents who don't particularly value their adviser's contributions.

The “valued advisers” also received three times as many client referrals, a higher share of the client's assets, and more clients looking to consolidate all their assets with them.

Fidelity found Generation X and Y clients to have the strongest relationship with their advisers. Generation X/Y clients provided 80% more referrals. Younger clients said the most important thing an adviser can do for them is make their financial lives simpler. “As young people are accumulating wealth, it's a pretty overwhelming task to understand the financial landscape,” Mr. Ozer said. “Those advisers who are educating and helping clients look at the broader picture are gaining trust.”

Those clients tend to lean more heavily on their advisers, as well. Almost three-quarters said they depend more on their advisers today than a year ago, compared with just 46% of all respondents.

Even though long-term planning is seen as a good thing, ironically, younger clients want to hear from their advisers on wonky market days. Almost 60% said they want to hear from their adviser if the market moves a lot in one day.

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Featured video

Events

What's the first thing advisers should do when they get home from a conference?

After attending a financial services conference, advisers can be overwhelmed by options, choices and tools. What's the first thing they should do when they get back to their office?

Latest news & opinion

Maryland jumps into fiduciary fray

Legislation would require brokers to act in best interests of clients.

8 apps advisers love for getting stuff done

Smartphone apps that advisers are using in 2018 to run their business more efficiently.

Galvin's DOL fiduciary rule enforcement triggers industry plea for court decision

Plaintiffs warned the Fifth Circuit that Massachusetts' move against Scottrade signaled that the partially implemented regulation can raise costs for financial firms.

Social Security underpaid 82% of dually entitled widows and widowers

Agency failed to tell survivors that they could switch to a higher retirement benefit later.

Is Fidelity competing with retirement plan advisers?

As the Boston-based mutual fund giant expands the products and services it brings to the retirement market, some financial advisers say the firm is encroaching on their turf.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print