YOUR BUSINESS the choices of consumers as their wealth grows ( though it wasn ’ t big enough to trace what happens with people who pass $ 50 million in net worth ). That offered us a glimpse of these trends :
• Richer consumers are much more likely to work with advisors . Sixty-five percent of those with more than $ 5 million in net worth do while only 53 % of those with net worth between $ 1 million and $ 5 million do . The figure was 26 % for those with less than a million .
• Richer consumers rely less on recommendations of friends and family when looking for an advisor . Many certainly start their search by asking for recommendations from other people , but they do it less so than others . Only
Advisor Traits Sought By Business Owners Vs . Employees
Very experienced
Certified Financial Planner ( CFP ) 25 %
Has great investment returns 30 %
Great communicator
Highly recommended by friends and family
Financial Planner
Fiduciary
Competitive price
Specializes in clients like me
Part of a team
Independent
Works for the top firm in our town
Has the same interests and hobbies as I do
Female
Young
Works for some notable celebrities / rich clients
Has published articles and books
Went to the same college that I did
4 %
4 %
4 %
4 %
4 % 3 %
2 % 3 %
Is a personal contact 1 % or friend 5 %
9 % 10 %
8 % 11 %
7 % 7 %
10 %
11 %
14 %
15 %
14 %
17 %
27 %
30 %
26 %
24 %
23 %
21 % 24 %
24 %
28 % 30 %
31 %
38 %
38 %
■ Employed
■ Business Owners
46 %
51 % of the richer consumers ( with $ 5 million or more in wealth ) start with a recommendation while 65 % of those in the lowest levels of wealth do .
• Richer consumers are more likely to look at a brand they know ( something 50 % of them said ) or go to their brokerage firm ( mentioned by 41 %). Independent advisory firms will not like to hear this , but the good news is that business owners like the term “ independent ” more — 13 % included that term among the top three traits of an advisor while only 8 % of employees did .
People with more than $ 5 million in net worth are greatly prized as advisory clients . The conventional wisdom is that they are elusive . But they may not be as elusive as we think , or at least not at the $ 5 million level . They show a similar if not higher tendency to go to events and read materials , and they have an interest in articles and financial programs . But they do tend to prefer their own sources to solicitations .
Business Owners
Business owners are a category all their own . To begin with , more than half of them ( 52 %) work with an advisor , while only 34 % of those getting most of their income as employees do .
The way in which business owners choose their advisor is also very different . While business owners also ask for recommendations ( something 63 % say they do ) 51 % speak with their CPA while only 32 % of employed people do . Business owners are also much more likely to seek advice from a known financial services brand — most likely their bank , something 45 % of them said they do while only 33 % of employees did .
Overall , business owners look for more varied characteristics in a financial advisor — not only the advisor ’ s experience as a planner , but his or her great communication skills , published material and fame .
PHILIP PALAVEEV is the founder of the G2 Leadership Institute , a two-year leadership and management program that trains and develops the next generation of leaders of advisory firms .
DECEMBER 2023 | FINANCIAL ADVISOR MAGAZINE | 31