Frequent updates are most important to investors--more so than whether they pay fees or commissions, or whether they use individual managed accounts or mutual funds, according to a survey conducted for CapTrust Financial Advisors.
The study attempted to gauge investors' perceptions of the fee-based consulting style of business.
Investors want an update that goes beyond simply receiving a monthly statement. More than 90 percent of investors who receive a regular update say it enhances the broker's credibility.
The positive response to regular updates was "one of the blow-away areas," says Bobby Lamy, a Wake Forrest business school professor who directed the study. In fact, the more assets invested, the higher the value investors place on frequent updates.
The use of money managers was a wash. Clients don't see the difference between a broker handling the money versus a money manager. "There were a lot of 'don't knows' and 'not sures' on this one," Lamy says.
Satisfaction with paying fees compared with commissions is somewhat higher--93 percent of respondents report a high level of satisfaction under a fee structure versus 83 percent under a commission arrangement.
The survey also indicated that it is important for advisers to separate the process of setting goals and objectives, from an analysis of risk tolerance and an investor's time horizon. Investors tend to see these areas separately.
The results are based on interviews of 250 investors with at least 250,000 dollars in investable assets.
The survey was conducted by Wake Forrest representatives this past July and August.
For more detailed study results, call Bob Boyce at CapTrust at 800/929-0375 or e-mail [email protected]