Fri, Feb 23, 2018
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Cerulli: Investors have more trust in advisors than in financial firms

Thursday, January 31, 2013
Opalesque Industry Update - According to The Cerulli Edge - Advisor Edition, 1Q Issue from Boston-based global analytics firm Cerulli Associates, investors have more trust in advisors than in financial firms overall.

"In both 2008 and 2012, only 28% of households indicated they believed financial firms regularly considered investors' best interests when presenting products and service options," explains Scott Smith, director at Cerulli Associates. "During the same period, the investors who indicated they believe firms do not look out for their best interest rose from 37% in 2008 to a peak of 41% in 2010."

The most recent issue of The Cerulli Edge - Advisor Edition reviews the key trends, opportunities, and challenges for advisors and their distribution partners in the coming years.

"While firms have managed to build trust back to pre-crisis levels, the more disconcerting fact is that less than 30% of investors believe their interests come first at the firm level," Smith continues. "Fortunately, investors have a higher level of expectation when it comes to the individuals handling their accounts. Two-thirds of investor respondents indicated that the advisor assigned to their account must put client interest first at all times, which results in a significant gap in trust between what investors believe about advisors and their firms."

Cerulli's research finds that investors expect that their advisors are obligated to put their interests first, but this is not currently the case for most investors. Those investors with investment advisory relationships are assured their advisor is operating under a fiduciary standard and must put client interests first.

"Investors who hold brokerage accounts are assured of a suitability standard of care through their registered representative. This essentially means that investments offered to the client must be consistent with their best interests, but not necessarily the best option available," explains Smith.

Cerulli finds that deepening client trust is essential for firms that want to maximize the value of their client relationships. Only by truly aligning their business models with investors' interests and expectations will firms be able to increase their addressable opportunities. Cerulli believes that firms that fully embrace and promote their roles as fiduciary providers are most likely to increase their opportunities among retail investors.

Press release

These findings and more are from The Cerulli Edge - Advisor Edition, 1Q 2013 issue .

CLICK HERE to request a press copy of this research.

Bg

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Art & Motion launches collectible car alternative investment vehicle[more]

    Komfie Manalo, Opalesque Asia: Luxembourg-based Art & Motion has launched a new investment vehicle dedicated to vintage cars and exceptional high-quality vehicles as this collectible market has grown exponentially the turn of the centu

  2. Opalesque Exclusive: Global Sigma captures February's long-vol trade[more]

    Bailey McCann, Opalesque New York for New Managers: Florida-based Global Sigma rode February's volatility to new highs. The firm's AGSF strategy is up +2.8 percent through February 16 and +4.2 percent YTD a

  3. Institutional Investors - Hedge funds regain their appeal for a $57 billion asset manager, Private credit strategies in stratosphere[more]

    Hedge funds regain their appeal for a $57 billion asset manager From Bloomberg.com: With volatility back on the radar, one of the Nordic region's biggest asset managers is considering relying a bit more on hedge funds to help oversee his portfolio. Mikko Mursula, the chief investment off

  4. Investing - All aboard for hedge funds as trade tide lifts shipping, Hedge funds pile into Time Warner in bet on merger success[more]

    All aboard for hedge funds as trade tide lifts shipping From Reuters.com: Forced to abandon ship after mistiming their investments five years ago, hedge funds are venturing back in a bid to profit from growing global trade flows. Around 90 percent of traded goods by volume are tran

  5. Investing - Hedge funds turn short on tech just as stock rally takes off, After biggest short, speculators slash bearish US bond bets as supply deluge looms[more]

    Hedge funds turn short on tech just as stock rally takes off From Newsmax.com: A key group of investors has just missed out on the biggest tech-stock rally since 2014. Hedge funds and other large speculators turned net short on Nasdaq 100 Index futures for the first time in 21 months, ac