Most Wealthy Investors Choose the First Advisor They Meet: Survey

Fifty-seven percent of wealthy respondents in a recent survey from Dynasty Financial Partners said they had not shopped around for a financial advisor but had spoken only to the one they chose to work with.

“It’s an extraordinary finding that high-net-worth families are selecting the first and only advisor they speak with,” Dynasty Financial Partners’ chief executive, Shirl Penney, said in a statement. “It’s like buying the very first house you look at.”

The survey, conducted between April 20 and May 1 by Dynasty Connect in partnership with Absolute Engagement, comprised 1,000 respondents with a minimum of $500,000 in investable assets, all of whom work with an advisor and have a say in household financial decision-making.

Due Diligence Gap

The survey found that 35% of respondents were prompted to seek professional advice because of a life event, including 54% of those between 35 and 44 years old. Life events included receiving an inheritance and a change in employment situation.

Forty-six percent of respondents said that when they were looking for a new advisor, they were referred to one by a family member, a friend or a colleague; these included 70% of those 45 to 54. Twenty-three percent said they were referred by a professional advisor, such as an accountant or lawyer.

“Sadly, data show that relying on your friends and family for referrals may not be the wisest strategy for these wealthy investors, as everyone’s circumstances and needs are unique,” Penney said.