Wealthy grab financial reins

Jan 13, 2013 @ 12:01 am

By Andrew Osterland

Rich people want to know what's being done with their money.

A survey of ultrahigh-net worth investors released last Thursday by the Institute for Private Investors found that the very wealthy are taking an active role in managing their own money — or at least an active role with their advisers.

Of the 75 surveyed families, all members of the institute, just 32% of those with under $50 million in assets said that they are comfortable giving full discretion over portfolio management to their financial advisers. Just one in five families surveyed with more than $200 million in assets give their advisers full discretion.

“The market has changed. Post-2008, people are taking more responsibility for their own wealth,” said IPI executive director Mindy Rosenthal.

It isn't that the clients don't trust their advisers.

The level of interest in control is constant regardless of the client's relationship with their adviser, Ms. Rosenthal said.

"MORE FOCUSED'

“Even families very happy with their advisers are monitoring them more closely,” she said. “They are more focused on risk management, transparency and conflicts of interest that their advisers may have.”

Sixty-three percent of respondents said that they have seen no progress or continue to see problems regarding conflicts of interest involving their advisers and their firms.

The IPI also surveyed 14 advisers to wealthy families, and surprisingly, they have similar views on the issue of conflicts. Just 38% said that their advisory firms are subject to fewer conflicts, and have more reasonable and transparent fees than five years ago.

aosterland@investmentnews.com Twitter: @aoreport

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