The turbulence of the Great Recession has prompted investors to seek financial advice from more than one professional, opening up opportunities for advisers, according to a new report by Cerulli Associates.
Nearly 40% of investors express an increased need for financial advice, prompting the typical investor to build relationships with multiple financial advisers, according to the report.
“I think the market downturn changed a lot of people's attitudes towards financial advisers,” said Roger Stamper, a senior analyst at Cerulli. “Just as people have always sought to diversify their portfolio, now they are diversifying their financial advisers.”
The average household that Cerulli surveyed works with 3.6 advisers, a big jump from an average of 2.9 advisers in 2008 and up from 3 advisers in 2012. This dynamic is even more pronounced among wealthy investors. Those with more than $5 million in investible assets typically work with 4.4 advisers, up from 3.3 in 2008.
Mr. Stamper said that if a client is spreading assets among other advisers, this doesn't necessarily mean you are doing anything wrong.
“This may just be the new normal,” Mr. Stamper said.
Advisers seeking to capitalize on this trend may want to focus on young millionaires, who are especially open to working with additional advisers, according to the study. Nearly a third of 30 to 39 year olds worth more than $5 million would happily pay for more advice.
Among people 50 to 59 with less than $100,000 in assets, 28% are in the market for advisers. Similarly, 27% of 60- to 69-year-olds with between $2 million and $5 million are seeking advice.
The study also notes that about one-third of investors may not use advisers right now but would be willing to do so if only they could be convinced of the value of financial advice.
“The best way for the industry as a whole to grow is to attract people who don't currently use advice,” Mr. Stamper said. “This is the group that advisers should target.”