More than half (52%) of investors surveyed this year have only worked with one adviser, while a quarter have voluntarily switched advisers once and 17% have moved twice, according to a new survey from Dynasty Financial Partners .
The firm released its annual Dynasty Connect Survey conducted in July regarding Absolute Engagement. The survey was based on responses from 1,000 investors who currently work with financial advisors and have a minimum of $500,000 in investable assets.
Some of the reasons cited for seeking a new advisor included investment performance (37%); advisor moved, changed firms or retired (35%); or they met a new counselor who impressed them more (30%). Only 6% cited “my spouse/partner died and I didn't have a strong relationship,” which is often reported as a top reason people leave their current advisor.
When investors were asked what would cause them to change today, investment performance was the top reason, at 47%. This was followed by a change in service levels (41%), moves/changes of adviser firms (39%) and a change in fee structure (33%).
Overall, 70% of respondents said they were “very satisfied” with their financial advisor. But the survey found that younger and younger customers were less satisfied. These groups were also more likely to switch advisers, as were those with fewer investable assets.
“Major life changes, such as marriage, divorce or a move are also triggers for change,” Dinasty said in a statement. “New clients initiate breakups more often, which suggests the need for a longer honeymoon period between client and advisor to build trust and lasting commitment.”
Forty-one percent of respondents said their grown children do not work with their advisor but may in the future, and 34% said they do not and likely will not in the future.
When investors choose an advisor to work with, they focus on understanding first, with 59% citing this as the deciding factor. This was followed by investment strategy or performance (51%), technical expertise or knowledge (47%) and “experience working with people like me” (46%).
The top feature investors would look for in an advisor today was to have access to a wide range of investment options, cited by 64%. Others want an advisor with a specific professional designation (52%), access to the latest technology (50%) and who charges fees based on assets, not commissions (46%). Only 20% of clients said it was important for the advisor to work at a large firm.