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
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.

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