Mass affluent leave brokers, in favor of indie advisers
After a year in which many investors lost substantial chunks of their wealth, mass affluent individuals are ditching their full-service brokers in favor of independent financial planners at a significant clip, according to a report released last week.
After a year in which many investors lost substantial chunks of their wealth, mass affluent individuals are ditching their full-service brokers in favor of independent financial planners at a significant clip, according to a report released last week.
According to Spectrem Group, just 22% of mass affluent investors — those with a net worth of $100,000 to $1 million — now rely on a broker as their primary financial adviser, down from 30% just one year ago.
Independent advisers, Spectrem noted, appear to be the most immediate beneficiaries of brokers’ losses: 22% of such investors now use an independent adviser, compared with 20% last year.
This shift represents the first time in the eight years that Spectrem has tracked these data that brokers weren’t the primary option for mass affluent investors.
“Whether linked to perceptions of financial institutions or a need to reassess their investing, this shift coincides with a strong move toward conservative investing by the mass affluent,” George H. Walper, Jr., president of Spectrem, said in a statement.
The company polled nearly 1,500 mass affluent households in July for its report.
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