In Practice June 17, 2009

1 in 4 Americans Want to Give Financial Firm or Broker the Boot

A survey by Charles Schwab found that 25% of investors in the U.S. are considering changing financial services firms or brokers in the next year based on their overall frustrations with their current situation.
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An overwhelming majority of respondents (90%) said they are frustrated about the money they lost in the past year, and 76% said they are only somewhat confident in the guidance they receive from professionals, according to a news release of the results.

Only slightly more than half (55%) of respondents said they trust their current firm, and just a third (36%) think their firm is more stable than other firms.

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The survey found a top reason for investors to leave their current firm is “the financial stability of my firm being in question,”cited by 48% of respondents. In addition, cost and investment performance were cited by many as reasons they would consider leaving their firm (47% and 42%, respectively).

At the same time, Charles Schwab said many investors were wary of change, and when asked for reasons why they would stay with their current firm, responses included:

  • “I might lose money if I make a switch.”(26%)
  • “I don’t know of any better options.”(25%)
  • “It’s time-consuming to make a switch.”(22%)

When asked what they would like to be different about their financial firm or broker in the next year, the top responses related to the cost of working with them (34%), the quality of advice (32%), and the frequency of proactive contact (29%).

“With one in four Americans ready to make the move, investors are seeking a genuine partner they can trust to help them plan for the long-term,”said Andy Gill, senior vice president at Charles Schwab, in the release. “They are understandably frustrated by the last year and have responded by expecting more from the experts they turn to for guidance.”

 

Proactive Stance

 

However, investors are not just playing the blame game—they show interest in improving their financial situation. Fifty-one percent of those surveyed now review their finances at least once a day, compared to 27% prior to fall 2008. When asked what they are likely to do differently in the next year, the top responses were:

  • “Pay closer attention to how much money I have invested or saved.”46%)
  • “Set stricter budgets for myself or my household.” (45%)
  • “Pay closer attention to the state of the market.” (38%)
  • “Reevaluate my financial firms or providers more often.” (23%)

The Charles Schwab Make the Move Survey surveyed 500 respondents in the U.S. and was conducted by Kelton Research between June 4 and June 8, using an online survey.

Products June 17, 2009

Advisor Software Upgrades ASI Wealth Manager

Advisor Software, Inc., a provider of wealth management solutions for the adviser market, announced a new release for ASI Wealth Manager, a platform for personalized goal-based investment management.
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The enhancements are designed to improve the adviser’s ability to gather household balance sheet information and communicate more effectively with clients about their recommendations, said Advisor Software’s President Neal Ringquist, in a news release. “A recommendation is only as good as an adviser’s ability to explain it. With this upgrade, we continue to help advisers connect investors’ personal goals with their investing decisions,” he said.

The following new features were added to release 1.1 of ASI Wealth Manager, according to the company:

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  • Portfolio Diagnostics—allows advisers to compare a client’s Current Portfolio and ASI Wealth Manager’s Proposed Portfolio with the Target Strategy produced by ASI Wealth Manager. Advisers can see in summary form how the Proposed Portfolio better implements the Target Strategy, by analyzing various portfolio characteristics such as tracking error, expected risk, expected returns, and tax costs.
  • Retirement and Expenses Goal—gives advisers the option to calculate current and retirement annual expenses instantly as one total number, or as a detailed breakdown of expenses into categories such as utilities, transportation, children, or health care. Advisers can also adjust the retirement and expense goal prioritization as a percentage of a target goal amount, to illustrate for minimum and maximum levels within goals.
  • Balance Sheet Analysis—The household balance sheet is improved to provide feedback, alerting advisers when a client’s resources are insufficient to fully fund their liabilities and goals.

 

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