07/31/2006
Private investors say advisors fail to plan.
Affluent investors fear uncertain financial futures and are not receiving strong advice about it from their advisors, according to a survey released this week by Hartford-based Phoenix Companies. Respondents claim their financial advisors are not doing enough to support investors’ long-term needs, and are more likely to focus on wealth accumulation rather than financial planning.
Only 47 percent of those surveyed report receiving help with retirement planning; only 33 percent say they have received tax-planning advice. Advisors also failed to discuss estate planning with more than two-thirds of clients. Less than half received advice on asset allocation, perhaps the most important strategy for building sustained wealth. In response to this lack of guidance, the survey says that high-net-worth individuals are changing their primary investment goal from high return on assets to wealth preservation.
But investors themselves are also failing to adequately plan ahead. Despite expressed concerns for the future, the survey found that few respondents own or plan to own products that incorporate risk management features and performance guarantees. The survey calls for financial services firms to develop better products to meet the needs of affluent investors. It also says that high-net-worth individuals need to become more aware of potential risks.
The Phoenix 2006 Wealth Survey was conducted during February and March. Those interviewed had a net worth of $1 million or more, minus any debts and the value of their home.
—Tim Chan