After huge losses in the markets recently, it seems that the average investor may be fed up with their current brokers, especially the ones from big investment houses, e.g. Merrill, Morgan, and the like.
According to a new survey from Prince & Assoc. (via the Wealth Report):
81 percent of investors with $1 million or more in investible assets plan to take money away from their current advisor. An even larger number — 86% — plans to tell other investors to avoid their advisor. Only 2% plan to recommend their firm to other investors. That’s of critical importance, since wealthy investors often get investment advice from each other.
The irritation is especially high at the “brand” firms — large brokerages and banks. Fully 90% of clients of brand firms plan to take money away from their advisor and 70% plan to leave the advisor altogether. That compares with a mere 29% for the boutique, local advisory firms.
So what does this mean for investors and wealth-management firms? It could just mean a reshuffling of assets between branded firms, with big clients moving money from Merrill to U.S. Trust, or Lehman to Goldman. Or, more likely, it could accelerate the broader shift away from big-name advisors to smaller shops with fewer conflicts, lower turnover and more personalized service.
It’s time to consider independent advisory firms, whose fee-only, conflict-free structure provides their clients with unbiased, fiduciary service.
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