Advisor Affiliation Matters to Affluent Investors

April 4, 2024 — Boston

National organizations with well-known brands garner strength across wealth tiers

One of the largest criterion for selecting an advisor is the type of firm that employs the advisor. According to the latest Cerulli Edge—U.S. Managed Accounts Edition, brand recognition holds significant weight among affluent investors.

Affiliation with “a large, national organization” is favored among affluent investors currently working with an advisor (39%) and those unadvised (32%). In both groups, this option is more heavily favored by wealthier respondents, who also tend to skew older, reflecting a greater comfort level with established brands.

Meanwhile, 28% of respondents report having no strong preference for the type of firm with which their advisor is affiliated. These respondents underscore the potential impact of brand-level marketing to elevate a firm’s perceived capabilities and trustworthiness among undecided prospective clients.

Advisors who own and operate their own locally based practices score similarly (18%–19%) among both groups, with notable weakness among less wealthy investors who currently work with advisors, reflecting the challenge local businesses have competing with major brands for new client acquisition. “These overall preference levels present a bit of a challenge to emerging registered investment advisors (RIAs) and independent broker/dealer (IBDs) advisors, as they rarely possess high levels of unaided awareness among prospective clients in their periods of critical advice need,” says Scott Smith, Director of Advice Relationships at Cerulli.

The least desired choice among both respondent groups are advisory practices that offer only online engagement options—garnering 1% of advised respondents and 5% among the unadvised. “While Cerulli believes digital platforms will play a crucial role in the future of advice, these results underscore the importance of human advisors as the core of wealth management competitive positioning,” he concludes.

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Note to editors

These findings and more are from The Cerulli Edge—U.S. Managed Accounts Edition, 1Q 2024 Issue.

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