Millionaires willing to switch advisors, survey suggests

(February 2, 2004) Advisors serving Canada’s high net worth (HNW) market must maintain a positive relationship with their clients or risk losing them, a new survey suggests.

A Stenner Group poll released today reveals that 44% of millionaires surveyed have changed their primary advisor in the past five years. Investment performance was the main reason cited for switching, followed by lack of contact with the advisor.

“Not initiating the right amount of contact or providing limited service, in addition to poor returns, are certain ways for advisors to damage their relationships with clients,” the survey concludes.

About 40% of millionaires said they meet with their advisor once a year, although nearly 90% said they’d like more frequent meetings. On top of face-to-face meetings, 60% said they’d like some additional contact once a month, such as an e-mail or a phone call.

Nearly one in four respondents said they are never contacted by their advisor.

The survey also suggests that few HNW clients use more than two advisors to manage their household wealth — most use either one (38%) or two (33%). About one-fifth said they managed household wealth themselves, but few are completely self-reliant. Only 8% said they do not use an advisor at all.

About half of survey respondents used an advisor at a full-service brokerage firm. Accountants were the second most common channel.

Nearly 60% characterized their relationship with their advisor as either good or very good. More than one-third said the relationship was average, while 7% described it as poor or very poor.

More than 230 questionnaires were completed at four millionaire summits sponsored by The Stenner Group in Vancouver in 2002 and 2003.

Filed by Doug Watt, Advisor.ca, doug.watt@advisor.rogers.com