Up to 30% of clients will change advisers, consultant predicts
It took only a matter of months for the markets to lose nearly half their value, but advisers will feel the ripple effects of this economic crisis for years, predicts a prominent consultant.
It took only a matter of months for the markets to lose nearly half their value, but advisers will feel the ripple effects of this economic crisis for years, predicts a prominent consultant.
Anywhere from 20%-30% of wealthy clients will change advisers over the next several years, said George Walper, president of the Spectrem Group, a Chicago-based consulting firm that specializes in the wealth and retirement markets.
But “this is not a decision that clients will make quickly,” he said in an interview today.
“Many are still taking a wait-and-see attitude and will make the move to a different adviser once they have regained confidence in the economy.”
“But the turnover,” Mr. Walper continued, “will be substantial.”
While the typical millionaires saw their portfolios decline 30% from the financial crisis, according to Spectrem data, most of these individuals are not holding their advisers solely accountable for these losses at the moment, he noted.
But once the markets reach a point of stabilization, advisers will feel the blowback.
“Clients will look for advisers who can actually present real lifestyle solutions for their specific needs,” Mr. Walper said.
Although most wealthy individuals still feel fairly bearish about the economy, they are showing signs of optimism. According to Spectrem, the firm’s Affluent Investor Index — which measures attitudes of individuals who have more than $500,000 in investible assets — rose slightly earlier this month to -21, a rise of nine points since April and its highest reading since August 2008.
Spectrem’s Millionaire Investor Index also improved slightly, climbing seven points to a “mildly bearish” 19 last month, according to the firm.
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