Knowledge Tree
financial advisers
Also known as: financial advisers, financial adviser
Facts (31)
Sources
An Exploratory Study of the Wealthy's Investment Beliefs ... financialplanningassociation.org Mar 1, 2025 31 facts
claimHigh-net-worth individuals who avoid financial advisers often do so because they are confident in their ability to manage their own investments and may not appreciate the emotional support advisers provide.
measurementFinancial advisers can add 100 to 200 basis points in annual net return for clients by helping them manage emotions during market fluctuations, according to Kinniry et al. (2022).
perspectiveFinancial advisers are encouraged to educate wealthy clients about the benefits of proactive rebalancing.
measurementIn the study, 84 percent of high-net-worth individuals were interested in building their financial education, yet only 54 percent were receiving financial education from their adviser.
claimThe top three factors for wealthy individuals' satisfaction with their financial adviser are reputation/trust (professionalism and honesty), relationship (overall quality and frequency of communications), and service (ease of doing business and accuracy).
measurement70% of wealthy Americans work with a financial adviser, which is nearly double the rate of the general population.
measurement99 percent of high-net-worth individuals are very or somewhat satisfied with their relationship with their current financial adviser.
claimHigh-net-worth individuals are more likely to have a formal written financial plan and rely on a financial adviser than affluent individuals.
procedureFinancial advisers working with high-net-worth clients should enhance awareness of separately managed accounts and alternative investments, temper investment overconfidence, build financial literacy, proactively rebalance portfolios, and promote the non-financial benefits of professional advice.
claimThe primary reason high-net-worth individuals lack interest in hiring financial advisers is confidence in their own financial abilities.
referenceResearch by Cerulli (2022) and Envestnet (2023) highlights the importance of non-financial benefits provided by financial advisers to their clients.
claimLongevity literacy is an area receiving increased attention among financial advisers.
claimThe survey instrument for 'An Exploratory Study of the Wealthy's Investment Beliefs' asked respondents who currently use a financial adviser on an ongoing basis to rate their satisfaction with that adviser.
claimHigh-net-worth individuals frequently cite coordination with CPAs and outside advisers, as well as keeping emotions in check, as key services provided by financial advisers.
claimThe high-net-worth cohort was more likely to currently have a financial adviser and a formal, written financial plan compared to the affluent cohort.
claimThe most cited reason for respondents being unlikely to hire a financial adviser was confidence in their own ability to invest, with no difference in this sentiment between high-net-worth and affluent cohorts.
procedureFinancial advisers serving wealthy clients should adopt five specific actions: increase the use of separately managed accounts and alternative investments; use SPIES (Lurtz 2020) and premortem planning (Klein 2007) to reduce investment overconfidence; improve client financial literacy regarding life expectancy; encourage proactive portfolio rebalancing; and emphasize the non-financial benefits of advisory services.
claimFinancial advisers often assist high-net-worth individuals in managing emotions related to complex planning needs, such as divesting concentrated stock positions or planning for the succession of a family-owned business.
measurementAccording to Cerulli (2022), the top three factors high-net-worth individuals value in an adviser relationship are: understanding needs, goals, and risk tolerance (76 percent); providing transparency (76 percent); and explaining financial analysis clearly (75 percent).
measurement91% of investors with at least $3 million in assets use a financial adviser.
claimThe survey instrument for 'An Exploratory Study of the Wealthy's Investment Beliefs' asked respondents who do not use a financial adviser on an ongoing basis about the likelihood of beginning to use one in the next two years.
measurement74% of wealthy individuals are very satisfied with their financial adviser, and 23% are somewhat satisfied.
claimQuality of advice and investment performance are the fourth and fifth most cited reasons for wealthy individuals' satisfaction with their financial adviser.
claimThe survey instrument for 'An Exploratory Study of the Wealthy's Investment Beliefs' asked respondents who were likely to use a financial adviser to select desired services from a list.
measurementCerulli (2022) found that among households with at least $1 million in investable assets, 40% are adviser-reliant and 19% are advice seekers.
claimThere were no significant differences between high-net-worth and affluent cohorts regarding the importance of ESG factors, preference for active versus passive investment management, or the likelihood of hiring a financial adviser.
perspectiveFinancial advisers are recommended to help build their clients' financial literacy.
claimHigh-net-worth respondents were more likely to report that their financial advisers engaged with CPAs and other outside advisers and helped keep their emotions in check compared to the affluent cohort.
claimEnvestnet (2023) found that high-net-worth individuals value financial advisers for helping them remain focused on the long term during market fluctuations, providing peace of mind, and reducing stress and anxiety.
claimHigh-net-worth individuals are no more likely to consider hiring a financial adviser over the next two years than affluent individuals, according to Northwestern Mutual (2023).
claimThe survey instrument for 'An Exploratory Study of the Wealthy's Investment Beliefs' asked respondents who were unlikely to hire a financial adviser to select reasons for opting not to receive assistance.