Sun, Oct 4, 2015
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.


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. Performance - Hedge fund moguls Einhorn, Loeb, Rosenstein lose money in September, Risky strategy sinks small hedge fund[more]

    Hedge fund moguls Einhorn, Loeb, Rosenstein lose money in September From Billionaire stock pickers David Einhorn, Daniel Loeb and Barry Rosenstein on Wednesday told their wealthy investors they lost money in September as market turmoil inflicted more pain on some of America'

  2. Opalesque Exclusive: IRAs represent billions of untapped capital for hedge funds[more]

    Benedicte Gravrand, Opalesque Geneva: Retirement accounts might not be the first source that comes to mind for those looking to raise funds, but they may represent billions of untapped capital. Unlike traditional retirement accounts,

  3. Opalesque TV: One way to access market hedge funds in the EU under the AIFMD radar[more]

    Benedicte Gravrand, Opalesque Geneva: While the Cayman Islands, the US and Hong Kong await the pan-European marketing passport to be extended to alternative investment fund

  4. Vilas’ equity long bias hedge fund generates market-beating results[more]

    Komfie Manalo, Opalesque Asia: The Vilas Fund, an equity long bias fund managed by Chicago, Illinois-based Vilas Capital Management, posted five-year annualized returns, net of fees, of 23.47% vs. 15.87% for the S&P 500 Index, including divid

  5. Performance - Manager admits spin used to hide poor performance, Fortress macro hedge fund slumps 17.2% amid manager shakeup, In the hedge fund world, bigger is still better[more]

    Manager admits spin used to hide poor performance From … Colin McLean, managing director of SVM Asset Management, told FTAdviser that fund managers underperform all the time, so stories are often needed to mask or explain this. “People need to build a good framework