Wed, Sep 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. Cliff Asness attracts $360 million as liquid alternative funds hold up[more]

    From Bloomberg.com: As U.S. stocks suffered their worst month in more than three years in August, Clifford Asness’s managed futures fund was able to profit. Investors are taking notice. The $9.12 billion AQR Managed Futures Strategy Fund pulled in an estimated $360 million in net subscriptions last

  2. Activist News - Carl Icahn has snapped up a huge stake in Freeport-McMoRan, and the stock is ripping, Meet Europe's best activist investor[more]

    Carl Icahn has snapped up a huge stake in Freeport-McMoRan, and the stock is ripping From Businessinsider.com: Carl Icahn has picked his next target: Freeport-McMoRan. Icahn and a group of other investors have snapped up an 8.46% stake in mining company Freeport-McMoRan, according to a j

  3. North America - Hedge fund manager Ray Dalio’s challenge to the Fed[more]

    From Newyorker.com: For some reason, Janet Yellen, the chair of the Federal Reserve, decided to skip this year’s annual Fed conference in Jackson Hole, where monetary policymakers from the United States and abroad get together with some prominent academics to discuss the big issues of the moment. Th

  4. Performance - Einhorn and Loeb's hedge funds both decline 5% in August, Some target-date funds miss in the market turmoil[more]

    Einhorn and Loeb's hedge funds both decline 5% in August From Reuters.com: Hedge fund billionaires David Einhorn and Daniel Loeb saw their main funds lose roughly 5 percent in August during a dramatic market sell off, two people familiar with their returns said on Monday. Einhorn's

  5. Opalesque Exclusive: Foundation returns slide, but commitment to alternatives remains[more]

    Bailey McCann, Opalesque New York: Private and community foundations posted returns of 6.1 percent for the 2014 fiscal year (January 1 – December 31, 2014), down from the 15.6 percent return reported for FY2013, according to the latest Council on Foundations–Commonfund Study of Investment of End

 

banner