Recent Survey Reveals Investor Inertia Caused by Feelings of Obligations; Unawareness that Changes is an Option

Dynasty Financial Partners today announced the results of its annual Dynasty Connect Survey of high-net-worth investor sentiment. The 1,000 respondents, all of whom currently work with financial advisors, each have a minimum of $500,000 in investable assets and were surveyed between July 5 – July 15, 2024. For context, 29% began working with their financial advisors within the past four years, and 27% within the past nine.

Dynasty Connect is an outsourced front office and partnered growth engine for firms in the Dynasty Network, dedicated to supporting both their organic and inorganic growth efforts through the identification, qualification, nurturing, and referral of high-quality prospects - both end clients and advisors interested in joining Dynasty Network firms. To the prospective end client or advisor, Dynasty Connect is a concierge service dedicated to understanding their needs in finding an advisor or advisory firm, providing education on the options available to them, and making an informed connection to advisory firms well-suited to meet their needs.

To learn more about Dynasty Connect please visit www.dynastyconnect.com.

The Dynasty Connect Survey lays bare the reality that, emotionally, breaking up with a financial advisor is hard for many investors to do, even though, legally, making that switch is straightforward and can often be facilitated by the new advisor. Fear or intimidation of the prospect of change, as well as the uncertainty around whether any better options exist, are the key mindsets fueling ‘Investor Inertia.’

One

A stunning 52% of survey respondents have only ever worked with one advisor. Only 25% have voluntarily changed advisors once, and a mere 17% have changed advisors twice. While the top reasons for switching advisors are no surprise – i.e., investment performance and an advisor’s retirement or firm move – interestingly, 30% of respondents cited “meeting a new advisor who impressed them more” as their inspiration for a new start. Personality/fit, fees and structure of fees, and lack of contact with their advisor were other key levers for change.

“Most people haven’t hired more than one or two financial advisors, and it can be hard to know when it’s time for a change,” said Tim Oden, Chief Growth Officer at Dynasty Financial Partners. “But if you’re not getting the attention or results that you were expecting, you owe it to yourself and to your family’s future to seriously consider other options. Especially as we experience continued volatility in the markets, now is a particularly important time to make an honest assessment of the service and attention you are receiving.”

On balance, the Dynasty Connect Survey found that younger clients, and those with less investable assets, are more likely to switch advisors. Major life changes, such as marriage, divorce, or a move are also impetus for change. Newer clients initiate break-ups more often, which suggests the need for a longer honeymoon period between client and advisor to build trust and lasting engagement.

What Have You Done for Me Lately?

The methods of switching financial advisors mirror generational and technological shifts. Younger investors are more likely to consult online databases and search tools, while older clients are typically referred to their advisors by other investors.

Overall, 59% of respondents cite an advisor’s ability to understand their specific needs as key to finding a match, while the dissolution of one typically boils down to disappointment in returns or service.

Don’t Start Now

The vast majority of Dynasty Connect Survey respondents value financial planning above all else, while the worth of other aspects of their client/advisor relationship is determined by their unique needs or circumstances.

For example, while 45% of respondents cite tax planning as a service offered by their financial advisor, only 28% of them value that feature. With these statistics, the survey illustrates that the lack of consistency in services valued means that personalized offerings are key to a successful long-term client/advisor relationship.

With or Without You

Overall, the investors surveyed expressed confidence that their advisors could support them during key life transitions; however, the ‘strong confidence’ rating declined for portfolio structuring and market events. 48% of respondents cite potential conflicts of interest due to the fact that the firm their advisor works for makes money directly from the investment products in which their money is invested. According to the results, younger clients are more likely to distinguish potential conflicts of interest.

Torn

41% of the survey respondents’ adult children do not work with their financial advisor. Further, 34% likely will not in the future. The multigenerational opportunity is apparent; however, adult children clearly feel torn about working with the same advisor as their parents.

ABOUT ABSOLUTE ENGAGEMENT

Absolute Engagement, empowers advisory firms to co-create, scale and measure an engaging experience with prospects and clients. Their award-willing engagement technology reveals what is in the hearts and minds of prospects and clients and allows advisors to respond to relationship risks, unmet needs and growth opportunities in real time. Absolute Engagement also conducts ongoing research among high-net-worth clients across the country and team engagement research on behalf of advisory firms.

About Dynasty Connect

Dynasty Financial Partners introduced an End Client Referral Program called Dynasty Connect. Through the program, high-net-worth individuals across the U.S. are able to contact Dynasty to connect with an independent financial advisor. Dynasty has over 400 independent financial advisors on its platform located across the country.

The objective of the program is to connect high-net-worth investors with independent advisors so investors can find a “custom fit.” High-net-worth investors will experience working with Dynasty’s independent advisors and the cutting-edge platform that Dynasty affords its Network advisors.

To learn more about Dynasty Connect please visit www.dynastyconnect.com.

Also visit Dynasty Connect on social media:

LinkedIn: https://www.linkedin.com/company/dynasty-connect

Twitter: @DynastyConnect

About Dynasty

Dynasty is a provider of technology-enabled wealth management solutions and business services for financial advisory firms primarily focused on serving high net worth and ultra-high net worth clients. Dynasty provides access to a comprehensive platform of software and technology tools, business services and holistic investment management capabilities through an open-architecture platform delivered via a suite of proprietary and third-party technologies. Dynasty’s technology, tools and services provide advisory firms the supported independence to launch their business, scale their operations and grow their firms — both organically and inorganically — while also allowing them to be more focused on and better equipped to serve their clients.

For more than a decade, Dynasty has championed the benefits of independent wealth management for high net worth and ultra-high net worth clients and has contributed to the movement of assets from traditional brokerage channels to the independent channels of wealth management. As Dynasty is becoming a recognized industry leader, Dynasty has differentiated itself by developing competitive strengths, including a deep understanding of and strong relationship with its clients, a comprehensive offering of services and technology-enabled solutions, the ability to leverage its size and breadth to invest, the flexibility and seamlessness enabled by a modular technology solution, the entrepreneurial culture and experienced and committed management team. Dynasty is committed to continually growing its business by facilitating existing advisory firm clients’ growth, onboarding new clients, increasing the clients’ use of its broader capabilities, launching additional solutions, and facilitating out complementary acquisitions.

For more information, please visit www.dynastyfinancialpartners.com.

Also visit Dynasty on social media:

LinkedIn: https://www.linkedin.com/company/dynasty-financial-partners

Twitter: @DynastyFP

*Dynasty Connect is a service offered through Dynasty Wealth Management, LLC, an SEC registered investment adviser and a wholly owned subsidiary of Dynasty Financial Partners, LLC.

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