Sun, Aug 2, 2015
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. Opalesque Exclusive: Despite bumpy June/July, CTAs hold on[more]

    Bailey McCann, Opalesque New York: To say that things have been rocky in managed futures recently is putting it mildly. In June, the industry saw its worst month on a performance basis in the past four years. Then yesterday,

  2. Investing - Hedge fund billionaires bet on London as revival gathers pace[more]

    From Bloomberg.com: London’s fund industry is bouncing back, and U.S. billionaires Steven A. Cohen and Ken Griffin are grabbing a piece of the action. Griffin’s Citadel and Millennium Management, a hedge fund run by Israel Englander, have bulked up in London, where asset growth is outpacing the U.S.

  3. Other Voices: Same day reporting and the evolving role of fund administrators[more]

    By: Scott Price, Head of Business Development and Client Management for North America, Maitland Ernst & Young’s latest glob

  4. Opalesque Roundup: Hedge fund assets rose to 11th consecutive quarterly record level: hedge fund news, week 31[more]

    In the week ending 24 July, 2015, the total global hedge fund industry assets rose to the 11th consecutive quarterly record level in 2Q15 to $2.97tln; Eurekahedge reported that hedge funds raised $93bn in the first six months of 2015; The SS&C GlobeOp Forward Redemption Indicator for July 201

  5. Cowen Group, Inc. to acquire Conifer Securities[more]

    Cowen Group, Inc. and Conifer Securities, LLC had announced the signing of a definitive agreement under which Cowen will acquire Conifer Securities, the prime services division of Conifer Financial Services LLC. The transaction, the terms of which have not yet been disclosed, was approved by the boa

 

banner