More Than Performance

More than 90 percent of clients have a clear preference for how they want their portfolio managed, according to a new CEG Insights survey of 808 investors with $100,000 to $25 million in net worth. George Walper, Jr., of CEG Insights and John Bowen, Jr., of CEG Worldwide report that 37.7 percent prefer their advisor to manage everything directly and 31.8 percent prefer a dedicated team, but the more consequential finding is about disclosure: 28.7 percent of clients say they would leave, or would consider leaving, an advisor who fully outsourced investment analysis and selection without telling them. Comprehensive reviews that go beyond investment performance (covering tax planning, estate planning, and cash-flow analysis) drive measurably more loyalty, referrals, and additional assets, especially among Generation Z and millennial clients.

Key Takeaways

1. 37.7 percent of clients prefer their advisor to manage investments directly, and 31.8 percent prefer a dedicated portfolio team, but fewer than 1 in 10 are comfortable with pure model-based management.
2. 28.7 percent of clients say they would leave, or would consider leaving, an advisor who fully outsourced investment analysis and selection without disclosing it.
3. 73.8 percent of clients say their trust in an advisor would increase if reviews went beyond investment performance to cover tax, estate, and cash-flow planning, rising to 90.6 percent among Generation Z clients.
4. 54.7 percent of clients say they would give an advisor more assets to manage after a comprehensive portfolio and financial-planning review, and 61.6 percent of clients with $10 million to $25 million say the same about held-away assets.