In the Advice Game, Bankers Lag Behind Financial Planners

Affluent investors often use several sources of personal financial advice. But banks will have to work hard to ensure that they're considered among those options, let alone climb atop the heap. In the advice arena, it's not just about share of wallet. As technology makes it easier to aggregate and analyze financial assets, it's a matter of "share of trust," as banks compete with professional services firms well outside of the traditional realm of financial services.

Indeed, bankers had a distant sixth-place finish when affluent investors were asked about where they turn for advice, according to a recent survey conducted by Mathew Greenwald & Associates on behalf of Nationwide Financial (Columbus, Oh.).

Leading the pack were financial planners, used by 41 percent of respondents. Following closely behind were Certified Public Accountants (CPAs) at 36 percent. "The evident shift in the affluent investor's view of accountants is exciting and promising for CPAs who are considering offering more comprehensive financial services to their clients and stepping up to take a broader advisor role," according to Richard A. Karas, president of NFS Distributors Inc., the distribution arm of Nationwide Financial. "The survey indicates there is great opportunity for CPAs to expand their services, deepen client relationships and potentially grow their business with high-dollar clients."

Tied for third place at 29 percent were stockbrokers and the Internet. Since the survey was conducted online, the strong showing of the Internet should not be entirely surprising. Somewhat more noteworthy is that people still trust stockbrokers for financial advice, even though 71 percent of respondents lost money in the market over the past three years. (It's probably just a coincidence that those who did not say that they had lost money was also 29 percent.)

Generally speaking, affluent investors have enough market savvy to know how the system works. "This survey reveals that affluent clients understand their advisors' roles, the long-term nature of their investments and the unpredictability of the current equity markets," according to Karas. "Investors trust the advisors they choose. To keep and continue to build on this trust, advisors should continue to educate clients and involve them in the decision-making process."

Attorneys came in fifth place (22 pecent), followed by bankers/personal bankers (20 percent), life insurance agents (15 percent) and home/auto insurance agents (12 percent).

When asked which source was the "primary financial advisor," only five percent chose "banker," versus 37 percent for financial advisor and 18 percent for CPAs. Given that banks intend to have a more prominent role in supplying advice to affluent customers, particularly as the Baby Boom generation begins to retire, there's still quite a gap for banks to bridge.