Majority of High Net Worth Individuals’ Assets Are Self-Managed

People who have been financially successful are often self-reliant and driven, two traits that serve people well in the business world. These same characteristics seem to make high net worth individuals more likely to manage their own portfolios rather than relying on the help provided by financial professionals. A new survey from industry research firm the Spectrem Group reveals that the average high net worth investor manages the majority of their assets without professional help. This is particularly true of younger high net worth consumers.

Producers who want to expand their share of the high net worth market should specifically target these younger individuals who have yet to start working with financial professionals in a meaningful way.

The importance of consistent contact

Because most high net worth consumers are using some form of financial guidance, financial professionals should labor to keep that business and grow the amount each individual client entrusts to them. With that in mind, it’s important to examine what consumers look for in the producer relationship. Generally speaking, consistent and reliable contact is one of the most important parts of the relationship between producers and their clients.

That doesn’t mean that a financial professional needs to contact consumers directly every day. In fact, the majority of consumers were fine with being contacted by an associate of the producer, instead of the actual financial professional. What mattered most was consistency and availability. The vast majority of consumers are looking for quarterly information about their financial plan and demand that their financial professional be responsive to any questions they have outside of these regular reports.

The source of relationship failure

According to Financial Planning, a failure to openly communicate with clients or contact them regularly leads to the dissolution of most financial professional relationships. Because people entrust more of their wealth to financial advisors as they age, a financial professional who can retain clients has a higher probability of managing more assets.

Spectrem found that many younger individuals managed a high percentage of their assets by soliciting advice from professionals rather than entrusting their assets to professionals directly. Being responsive to questions about money management will make a financial professional a trusted advisor and create the type of relationship that leads to long-term success. Financial professionals who engage young high net worth consumers today will reap the benefits years down the line.

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