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Morgan Stanley Says the Wealthy Trust Their FAs More Than Family

By Alex Padalka April 11, 2016

Financial advisors have more say in how the ultra high net worth allocate their wealth than any other third party — including family, according to a new study.

UHNW investors use a financial advisor 41% of the time when it comes to overall asset allocation, according to a survey of 59 members of families with a net worth of more than $25 million conducted by Morgan Stanley Private Wealth Management and Campden Wealth Research.

A family advisor or a family office executive is used 38% of the time, according to the survey.

By comparison, a committee of family members is used to make asset allocation decisions in 32% of the cases, and a head of family has sole discretion in such cases just 21% of the time.

And only 15% of the time are asset allocation decisions made with input from a committee but with the head of family retaining final authority, according to the survey.

Financial advisors are trusted even more when it comes to investing in a specific opportunity: they are used in 44% of such cases, while heads of families have sole discretion just 24% of the time and family committees do so in 29% of the cases, according to the survey.

“The fact that ultra high net worth individuals appear to listen more to their financial advisors than their own family members shows the premium placed on good, professional investment advice,” says David Bokman, head of Ultra High Net Worth Resources for Morgan Stanley, in a press release.

“Financial advisors play a very important role in family decision-making, and enjoy a special – and often very select – place at the table of these ultra high net worth families,” says Dominic Samuelson, chief executive of Campden Wealth. “In seeking to service them as best they can, financial advisors should look to gain as wide an understanding into families as possible and think about their complete needs.”

Dominic Samuelson

Furthermore, 89% of those polled said their wealth advisors had a strong influence or some influence in helping them attain their goals, while 84% said that family business strategy, partners or affiliates had that kind of influence, according to the survey. And only a third of UHNW individuals consider their parents a strong or moderate influence on their goals — and just a quarter thought so of their spouses.