Last updated: 12:28 / Monday, 8 August 2016
8th Fidelity Millionaire Study

62% of Promoter Clients Would Follow Their Financial Advisor to a New Firm

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62% of Promoter Clients Would Follow Their Financial Advisor to a New Firm
  • Two-thirds of millionaire investors rely on financial advisors to help them manage and protect their wealth
  • Referrals generate nearly half of new business for advisors and help drive organic growth
  • 55% of millionaires would recommend their advisors – many call them friends
  • 45% of millionaires would not recommend their financial advisors

Nearly two-thirds of millionaire investors (62 percent) rely on financial advisors to help them manage and protect their wealth. Similarly, advisors rely on their current clients to drive referrals, which generate nearly half (48 percent) of new business for advisors and help drive organic growth.

In its 8th release, Fidelity Investments’Millionaire Outlook Study looked at the state of the investor-advisor relationship. For the first time, the study calculated a Net Promoter Score (NPS), a commonly used tool that measures the likelihood that millionaire clients will recommend their advisors to colleagues and friends. The study found that 55 percent of millionaires are “Promoters”—meaning they are loyal to their advisors and likely to recommend them to others; in fact, of those Promoters, nearly two out of three (65 percent) would call their advisors their friends. That’s good news for advisors and those they serve.

However, despite seeing the value in hiring professional financial advisors, 45 percent of millionaires would not recommend their financial advisors to friends or colleagues. In fact, one in five (20 percent) millionaires are “Detractors”—unhappy enough that they may leave their advisor or discourage others from working with them.

“We have entered a ‘referral economy’ – where we, as consumers, thrive on sharing the people and things we value with those in our social and professional networks,” said Bob Oros, head of the registered investment advisor (RIA) segment, Fidelity Clearing & Custody Solutions.

“While this presents a tremendous opportunity for advisors, the challenge is uncovering the formula that drives millionaire clients to recommend them rather than remain silent — or worse — leave,” continued Oros.

Other findings include that 69 percent of loyal millionaires gave a referral in the last year.Promoters have 71 percent of their assets with their primary financial advisor, while detractors have about half (48 percent) of their assets with one; And promoters are ahead of their financial goals: 25 percent of promoters feel they are ahead of their financial goals, while only 7 percent of Detractors feel that way.

Three out of four millionaires who would recommend their advisor would also consult with them on what to do with a sudden and significant financial gain, while only 36 percent of detractors would do the same. In fact, 45 percent of detractors would invest it on their own, without consulting their advisor.

Promoters follow their advisors: 62 percent of promoters would switch firms with their financial advisor, while that cannot be said for detractors (only 17 percent would switch).

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