Updated Friday, September 19, 2014 as of 1:52 AM ET

Wealthiest Clients Have 4 Advisors, Study Finds

Do you think you are your clients' only advisor? Don't be so sure, if a Cerulli Associates study is any indication.

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Comments (5)
Better to have one very competent adviser that acts in a fiduciary capacity and as a family office. That way the main adviser can coordinate all activities. Otherwise, the client is acting more as a general contractor. Most wealthy clients do not have the time to adequately manage all affairs in a competent manner.
Posted by MICHAEL C | Wednesday, January 15 2014 at 8:29AM ET
I think what we are seeing is an acting out of the maxim" Familiarity breeds contempt". After being serviced by an advisor, somehow the client feels that he would be better off with somebody else. Today's client is willing to experiment and so he moves a part of his portfolio to another advisor. This will however work to his detriment in the future since he will be treated as a casual customer by the advisory firm when the client has parcelled off bits to others, and not as a valuable client.
Posted by tasha123 s | Wednesday, January 15 2014 at 9:49AM ET
I am not surprised by HNW Individuals (and Families) using 3.3 Advisors in 2008 to MORE in the last Survey! (I Would TOO if I was classified as HNW!) I would like to see the rest of the Survey Findings! Thanks for posting!
Posted by Bruce B | Wednesday, January 15 2014 at 10:29AM ET
We recommend diversification for virtually everything else, why not for financial advisors? It makes perfect sense to me and if I had an advisor who even suggested that I might be treated as a casual client he or she would no longer be on the team. The best advice I can give to anyone is to be extremely cautious and to not give too much power or control to any one person or firm. We have seen what happens when people do that.

Whether it's medicine or money, a second (or third) opinion has always made sense to me. I have been in the business 38 years and I don't know any advisors who always have the best answers. No matter how honest, skilled, or dedicated, nobody is right all the time. And I suspect that many HNW clients are smart enough to know that all advisors have potential conflicts of interest that should be considered. And yes, I did say all advisors.
Posted by C. Thomas T | Wednesday, January 15 2014 at 2:36PM ET
I agree totally with Michael.

If we look at the most successful private wealth business, it has been the family office. Simple, Centralized, Client Control, Integrated Team are among the benefits.

Historically, the primary obstacle has been the high barrier to entry to this most exclusive club, with estimates of $100mm in investment assets to afford a quality family office.

We have developed a new and unique innovation that enables investors with $3mm of more to access this private wealth world. Our service model, organizational structure and advisory process are patent pending. We rely on an integrated team of local wealth professionals to serve every client. Important financial decisions require this multi-disciplinary team to propose solutions, obtain client approval and the "primary advisor", implements the plan and monitors progress towards the clients goals.

We believe IF clients had this serivce model as an alternative, they would develop ONE team, make decisions with confidence and be well advised on the challenges and opportunities that often accompany sifnificant wealth.

As a former CPA/PFS with thirty years experience, who left Wall Street as a Director of the Citi/Smith Barney Family Office, I believe the reason the wealthy have multiple advisors is that they don't completely trust them. And many have proven to be untrustworthy, not on their own, as I have many friends in the securities business, but the Firms themselves, with their conflicts of interest and self-interest paramount, are an issue yet to be resolved.

Check out the web-site of @regionalfamilyoffices and you may get some insight. Better, call us, we love to converse with folks who love the business of wealth management.
What do you think?
Posted by JAMES C. E | Thursday, March 27 2014 at 3:17AM ET
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