Thursday, January 16, 2014

New Millionaires Need Financial Planning Advice

America's emerging millionaires are well positioned for asset growth but are also in need of more financial planning, according to research released Wednesday by Fidelity Investments.

The study from Fidelity's Insights on Advice series shows that 77% of those averaging $800,000 in total assets and an average household income of $150,000 do not have a written financial plan with 70% reporting they are "not very knowledgeable" about investing. Even so, only 51% said they work with financial advisors and 39% are "choosing to go it alone" with investing. Of those not working with a financial planner, 46% indicated they felt advisors "aren't interested in investors with smaller assets" and 53% were turned off by advisor fees.

While the findings show potential opportunities for advisors, they will need to be cognizant of different characteristics displayed by future millionaires compared to millionaires of other generations, says Bob Oros, executive vice president of Fidelity Wealth Services. Nearly half of the "millionaires of tomorrow" Fidelity polled are from Generation X/Y (49%) and are women (49%).

You are dealing with someone who is a bit scared by some of the fees that advisors charge ...Advisors are going to have to get more creative with creating their fees and possibly how much they charge

Oros pointed out that one independent registered investment advisor he works with at Fidelity has waived fees for new clients' first two years as a way to attract more people in the near millionaire space and anticipates other planners going the same route. For more information, Emerging Millionaires Need More Financial Planning, Fidelity Study Shows | Financial Planning


The attorneys at Sallah Astarita & Cox include veteran securities litigators and former SEC Enforcement Attorneys. We have decades of experience in representation of financial advisors and their clients in compliance, registration and litigation matters. For more information contact Mark Astarita at 212-509-6544 or email us.

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