The number of affluent clients ready to follow advisors to new firms drops. Advisors considering switching firms may want to think twice in light of new research. Although most affluent investors claim to be loyal to their financial advisors, only a small number of them would actually follow their advisors to new firms, according to a report by Chicago-based market-research and consulting firm Spectrem Group.

Fewer budging

"Financial advisors can no longer count on the fact that their 'loyal' affluent clients will follow them when they switch firms," says Spectrem's president George Walper. "While this may have worked in the past, today just one-third of affluent investors would quit their financial services firms to move with their advisors. This surprising turn of events has potentially serious ramifications for financial advisors looking to make their next career move -- and counting on existing business to pave the way."

In 2006, more than half of those surveyed -- 55% -- said they would follow their advisors to new firms.

The Spectrem report Client Satisfaction versus Loyalty also suggests that less than 20% of investors would consolidate all their accounts with one advisor -- and even for this loyal few, the decision would be based more on investment returns than on personal relationships.

Conducted late in 2007, the Spectrem report draws on a survey of 500 investors who have at least $500,000 in investable assets. -FWR

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