The Biggest Roadblock Keeping Wealthy Investors From Hiring an Advisor

John McKenna, research analyst at Cerulli, said that advisors have to ensure that their fee schedule is easy to understand and to detail exactly which services clients are paying for and how they will pay. At the same time, advisors must also understand how new clients want to engage with their finances and with the advisory team. 

“As more investors transition from being solo traders to seeking formal financial advice, they will want an advisor who understands their needs,” McKenna said in a statement. “That begins with the advisor being open not only about how advice delivery is carried out, but also the methods through which it is delivered.”

The study found that investors’ concerns tend to abate once they enter the advice relationship. At that point, only 11% of those who work closely with an advisor said costs were not transparent, and 12% said they were too high. 

Cerulli said it is incumbent on advisors to discuss their fee table with prospective clients, provide a good estimate of how much they can expect to pay and how they will make that payment, and show them the types of services they will receive.

“Regardless of how one communicates with a prospective client, it must be transparent from the first encounter on,” McKenna said. “This will remain critical for growing one’s book of business and building long-term, loyal relationships.”