Maybe All the Eggs Belong in One Basket

A white paper on asset consolidation from Principal Funds highlights opportunities for investors and financial advisers.

Approximately 5.7 million affluent households in the U.S. rely on more than one financial professional to manage their investible assets. Principal Funds partnered with Cogent Research to uncover the reasons investors use multiple financial professionals and how they might benefit by consolidating their assets with a sole or primary financial professional.

“Maximizing Value Through Asset Consolidation” highlights the reasons to consider asset consolidation for both investors and financial professionals. It also provides suggestions for financial professionals guiding clients through the transition.

“The research shows nearly 30% of those using multiple financial professionals didn’t intend to do so in the first place,” said Kevin Morris, marketing director of Principal Funds. “By selecting a primary financial professional, investors can trade their fragmented approach for a more holistic view of their investment goals, concerns and areas of interest.”

According to the study, only one-third of investors agree they are receiving better financial advice by using multiple financial professionals. Investors working with a single financial professional report:

Higher overall satisfaction with their financial professional;

Higher confidence in their financial professional’s capabilities; and

Increased likelihood to recommend their financial professional to others;

Of those investors who have consolidated their assets, 61% agree it’s easier to monitor their overall investment performance. A majority of investors said they are more satisfied with their financial situations after consolidating (55%) and reported being able to lower investment fees/expenses (54%).

“These findings clearly support the opportunity for financial professionals to proactively discuss asset consolidation with their clients,” Morris said.

The white paper is available for download at Principal’s website.