Taking on the Role of Lead Adviser

SSgA teamed up with Knowledge@Wharton, an online resource center from the Wharton School at the University of Pennsylvania, to publish the report, “Taking on the Role of Lead Advisor: A Model for Driving Assets, Growth and Retention.”  The report explores the relationship between investors and financial advisers following the recession, the unintended consequences of using multiple advisers, and opportunities for investment professionals who are willing to take on the “lead adviser” role.

SSgA and Wharton surveyed 2,196 financial advisers and 776 investors for the report. They found that 49% of investors manage their own investment portfolios, 34% work with one adviser, and 17% work with two or more advisers. Among those who do not use a financial adviser, more than 50% do not believe the value that advisers provide is worth the cost. The most cited reason (44%) for using two or more advisers is to diversify risk.

Even though the intention may be good (diversifying risk), investors may be taking on unknown risk, the research found. Of investors who work with at least two advisers, 65% consider one adviser to be their primary adviser; however, more than half (55%) of these respondents report their primary adviser is not aware that other advisers are also managing their assets. As a result of this disconnect, investors could be taking on too much or too little risk.

The report goes on to suggest that the lack of a “single view” on an investor’s complete financial picture could be used as a marketing opportunity for advisers. “Nearly every investor could benefit from the services of a competent lead adviser who integrates financial information across investment advisers, CPAs, estate planning attorneys and business advisers,” the report says.

Investment professionals can access “Taking on the Role of the Lead Advisor” by registering as a financial professional at SPDR University (www.spdru.com), an online educational center from SSgA.