One day you’re riding high with self-confidence and the next you’re peeling yourself off the pavement. Such is the nature of Wall Street. And reps who were feeling the love from an Investment Company Institute survey that showed investors believe advisors are worth their salt, got a kick to the shin today.
New research published May 1 by London-based market research firm TNS shows that there is a record-breaking number of millionaires in the United States but fewer are consulting financial advisors. (Millionaires are defined as $1 million in net worth excluding primary residence).
As of May 2006, TNS reports the number of millionaire households has risen for the fourth consecutive year to a record high of 9.3 million, which represents a five percent increase from the previous year. TNS released highlights from its annual Affluent Market Research Program (AMRP) – a survey of 1,600 households with a net worth of more than $500,000 – which found that not only are the rich getting richer, but they’re also getting more independent, as an increasing number are opting for online trading.
Online trading among millionaires who have Internet access rose to 32 percent, which TNS says represents a 45 percent jump over the last five years. Still, 60 percent continue to obtain investment advice from a professional financial advisor. Among 37 percent who do not use a financial advisor, 46 percent said, “I feel I do better managing my own money,” while 31 percent said, “the wealth of information makes a professional advisor unnecessary.”
Reps who sell mutual funds got a hug from investors earlier this week when the ICI published a survey that showed the value that advisors provide fund shareholders. Despite the increasing availability of information on the Web, most mutual fund investors still seek help from advisors in picking funds and drawing up a comprehensive financial plan. And that not only do they value the advice they’re getting, but also they feel it’s worth paying for it. So depending on whom you talk to, financial advisors are either becoming more or less relevant.
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