FINANCIAL ADVISORY PRACTICES
Resources
- Only 38 percent of advisors have a clear recovery strategy and communicate
it with confidence. This means that nearly two-thirds of advisors are
incapable of guiding their clients through this crisis. (source: Registered
Rep)
- "There's approximately 10% of the total financial advisors of
the major firms that practice true wealth management or have a holistic,
consultative practice. Which means 90% do everything else." - Rick Capozzi,
Managing Director, Morgan Stanley Global Wealth Management Group
- More than three-quarters of financial advisors say they have not lost
clients, and in some cases have even gained clients. So how can
it be that more than three-quarters of affluent clients say they plan
to move money but three-quarters or more of advisors say they haven't
lost clients? - "Who's Lying: Clients or Advisors", March 2009, FA Magazine
- The term "wealth management" is grossly overused in
the financial services industry today. The vast majority of financial advisors-77.9 percent, according to a Prince/Geracioti study
call themselves wealth managers. Yet just 8.4 percent truly fit this description, according to data obtained in a study of 1,177 financial firms. The others act as investment generalists (79.1 percent) or product specialists (12.4 percent).
Source: Wealth Management (Wealth Management Press, 2003); Prince & Associates, 2004. Analysis: CEG Worldwide, LLC.
- "Wealth-management business CEO's rate only 17 percent of their current
client relationship managers as having the skills to manage the needs
of their clients." (Source: PricewaterhouseCoopers' 2007 Global Private
Banking/Wealth Management Survey)
- In 2008, 87 percent of advisors said they were "somewhat" to "very" satisfied
with their career. In 2009, that figure dropped to 62 percent. (source:
Registered Rep)
- Spectrem Group Study:
- The population of millionaires has taken its biggest percentage
plunge since the firm started collecting data about 10
years ago. Households in the U.S. with a net worth of at least
$1 million, excluding primary residences, has dropped to 6.7 million
in 2008 from 9.2 million in 2007.
- The number of households with investible assets of at least $1
million fell
by 26% to 4.4 million from 5.98 million.
- Households with a net worth of $5 million or more are also declining.
Their numbers fell to 840,000 from 1.16 million
- Almost half of all millionaire households lost more
than 30% of their net worth, while a full 17% say they
lost at least 40% of their money.
- The total net worth of Americans was $51.5 trillion as of 12/31/08, down
18% in the last year, reaching its lowest level since 9/30/05
(source: Federal Reserve).
- 80.6% of investors plan to take away money from their advisor
44.7%
of investors will not recommend their advisor to other investors
56.7%
of investors plan on leaving their advisor
-
September 2008,
Prince & Associates, Inc.
- Only 2% of investors with more than $1 million in investable assets
plan to recommend their firm to other investors -Tiburon report Current
Events: Making Sense of The Impacts
- 36% of millionaire households are unhappy with their
advisor's performance, while only 14% say they plan to make more use
of advisors in the future. (Source: Spectrem Group)
- Why financial advisors lose their clients:
- Poor service
- Inadequate communication
- Advisors not being honest and upfront about
their fees (Source: Spectrem Group)
- Thane Stenner, founder of Stenner Investment Partners, says many wealthy
investors are displeased and unsettled about
their current advisory relationships, but they are unsure what to do
about it.
- "The typical baby boomer is still 14 years away from retirement, which
means that wealth accumulation is still a big issue for 77 million of
them" - September 2008, ONWALLSTREET
- Of the more than 10,000 Americans that were surveyed early last summer,
only 27% were confident that they had or were saving sufficient money
for their retirement.
Another 23% were not sure (source: Retirement Made Simpler).
- 31% of current American workers have done no planning or saved any
money for their future retirement (source: Principal Financial)
- 4 in 10 (40%) Mass Affluent investors do not have a financial plan.
Of those without plans, 40% think they are important and nearly one-fourth
would like to have a professionally prepared plan. (source: Spectrem
Group)
- Only 69.5% of advisors are helping their clients create and execute
a financial plan and only 53% claim to provide financial organization.
These are two of the eight criteria the affluent look for in a financial
professional. (source: Registered Rep)
- Survey of 1,305 independent financial advisors conducted by Curian
Capital LLC, a Denver-based registered investment advisor, reports:
- 90% of advisors feel that at
least 20% of their clients don't have enough money
set aside to retire at their expected income levels
- 40% of advisors feel the biggest threat to their clients'
retirement planning is a lack of time to build wealth
- 69% of advisors say they haven't changed their clients'
portfolios in the face of market volatility
- Contradictory result: the survey shows 97% of advisors say retirement
income planning is the most valuable asset they provide clients, and
yet 55% would outsource that planning to a third-party asset manager.
- To rank in the top 1% of all US taxpayers, an individual would have to earn $388,806 of adjusted gross income (source: IRS, Tax Foundation).
- The top 1% of wage earners took home 22.1% of all national income in 2006, up from 8.5% in 1980. This same group paid 39.9% of all federal income tax in 2006, up from 19.1% in 1980 (source: IRS, Tax Foundation).
