NEW YORK — Although most millionaires feel that their wealth is “extremely secure,” many still have not found the kind of financial advice that suits their needs.
According to the annual wealth survey by The Phoenix Cos. Inc. of Hartford, Conn., 34% of millionaires young and old lacked a primary financial adviser.
Thirty-five percent of responding investors under the age of 45 with between $1 million and $2 million in assets said they didn’t have one, as did 38% of respondents 45 and older in the same asset range.
Although most affluent people who had an adviser were satisfied with them, “only 24% said that they are extremely satisfied,” said Walter Zultowski, senior vice president, research and concept development, at Phoenix. “If we really want to make them satisfied, then we have to start doing the other things.”
“People are looking for an adviser that has them in mind and is looking out for pitfalls,” Mr. Zultowski added.
Some of the value-added elements clients crave include help with tax planning (20%),
estate planning (19%), wealth transfer techniques (15%) and health care (11%), he said.
Range of complaints
Among the 7% of respondents who said they were going to look for a new adviser, complaints ranged from not being proactive in maintaining contact and less-than-expected investment returns, to not offering needed products and services.
The online survey, which was conducted in February and March, looked at more than 1,863 high-net-worth households — those with $1 million of more in assets, excluding the primary home.
Financial advisers are trying to find solutions to accommodate the varying needs of their clients to compensate for their range of concerns.
“The typical millionaire has more than one adviser, and the typical adviser doesn’t have all of the expertise,” said Andi Kang, president of Crown Wealth Management Inc. of Huntington Beach, Calif., which manages $30 million.
She said that her firm merges relationships with certified public accountants, attorneys and insurance agents in order to come up with a plan of action that will encompass all of a client’s needs.
“The wealthy don’t always see themselves as wealthy; they see themselves as being successful, and they are always surprised that their net worth is larger than they realize.”
Another adviser suggested that building a practice which tailors advice to a client’s needs is a major factor for success.
“As long as the client is the center of your practice, tailoring the advice to fit those clients isn’t an issue,” said Rick Brooks, vice president, investment management, at Blankinship & Foster LLC in Solana Beach, Calif., which manages $330 million. “If you are going to sell product, then you are going to have a hard time trying to suit the story to the client.”
Feeling richer
Despite the significant chunk of wealthy investors that aren’t flocking to advisers, 81% of this group said they felt even wealthier than they did in 2006.
“This data codifies and confirms that people have felt generally better [about their financial state of affairs],” said Stephen Gresham, executive vice president and director of retail markets at Phoenix Investment Partners Ltd. “There have been some pretty rocky times in the markets, and people feel generally OK, and that bears watching.”
Mr. Gresham added that the high level of confidence is a function of wealthy Americans’ having real estate in their portfolios, leading them to feel that they are in good financial condition.
However, he said, they know that the feeling of security is fleeting, and it is based on factors that are out of their control.
Sixteen percent of the group surveyed were under 45 and had between $1 million and $2 million in assets. That segment is focused on capital preservation and investment returns.
“The numbers are reflective of a younger demographic and their need to pick up on a lot of lifestyle issues,” Mr. Gresham said. “One significant theme is that most people in this generation have acquired a sense of lifestyle, and it may be more than they are willing to finance.”
