Millionaires value personal trainers more than their wealth advisors

Millionaires are increasingly dissatisfied with their wealth managers and accountants, but they value their personal trainers and therapists, according to a new survey.

Only a third of millionaires use a wealth advisor for their financial planning, and 1 in 5 plan to fire their advisors due to high costs and poor service, according to a new survey from Long Angle, a professional network for startup founders and CEOs. Of those who use advisors, 26% are considering switching advisors and 18% may stop using advisors altogether.

In contrast, millionaires are more satisfied with their personal trainers, therapists, and other professionals who help with their overall health and family care than with financial issues.

“Improving your balance sheet or bank account does not provide the same emotional value as improving your health and family life,” said Chris Bendtsen, market intelligence leader at Long Angle. “Services aimed at your personal well-being or your children receive the highest marks.”

The results underscore the growing importance of so-called “soft services” for the wealthy, as asset managers, private banks and other firms seek to attract and retain higher net worth clients. Health and wellness, family and children, travel and personal development services, once seen as superficial alongside financial advice and tax planning, are becoming core competencies in the business of advising and assisting affluent families.

For the study, Long Angle surveyed 114 people worth at least $2 million; the majority had a net worth between $5 million and $25 million. They were asked to rank their satisfaction levels with 14 of the most common professional services used by the wealthy, from investment advice and estate planning to sports coaching and cleaning services.

Personal services, child care and education are at the top of the satisfaction rankings. Millionaires surveyed gave their personal trainers an average rating of 9.3 on a scale of 1 to 10; this was the highest satisfaction for any service category. They were also satisfied with their investment visa consultants (8.8) and then their personal sports coaches and therapists. They also placed high value on services for their children, including private school (8.3) and nursery (8.2).

Financial, home and real estate services are at the bottom. The implications for asset management are particularly striking. Wealth advisors’ satisfaction level was 7.2; Most survey respondents said they didn’t even use a consultant. The use of financial managers increases as wealth increases. Only 22% of those with wealth of $5 million or less use advisors; this compares with 44% of those worth $25 million or more.

Their main complaint is cost. The average spend for financial advisors is $10,000 per year, according to the survey. The majority of survey respondents pay fees based on a percentage of assets under management. One-third of participants pay a fixed annual fee.

Because the executive is paid as a function of asset size rather than performance or quality of service, many clients increasingly view asset-based fees as inherently disproportionate. Frustration with costs is one reason why more advisors are switching to fixed fees.

“Fixed fee structures reflect growing customer preference for transparent pricing and reduced conflicts of interest,” the report said.

Beyond cost, wealthy investors are also frustrated with service.

“General feedback is that advisors are often slow to respond and advice is not personalized,” Bendtsen said.

Accountants and tax lawyers were not doing so well. 82% of respondents use a CPA or tax professional for their taxes, while 42% are considering switching tax advisors. Their main complaints were that CPAs were slow to respond and not proactive or strategic enough.

When it comes to estate planning, half of the millionaires surveyed do not use an estate lawyer, although their use depends largely on wealth level. 69% of those with $25 million or more use a real estate attorney. In terms of satisfaction levels, real estate lawyers rank below pool services.

The low ratings for financial and legal service providers and the high ratings for more personal services go beyond the predictable emotional benefits of feeling and looking better every day. Athletic trainers, sports coaches, teachers and even house cleaners appear to be better at providing the highly customized, targeted help the wealthy seek, rather than the formulaic solutions often provided by wealth managers and lawyers.

“We heard that asset managers, real estate attorneys and CPAs are feeling more transaction-oriented,” Bendtsen said. “They don’t feel personalized.”

Children’s services also score highly and account for a high share of the wealthy’s spending. Respondents spend an average of $53,558 per year on nannies, $30,000 per year on private school, and $20,000 per year on day care. The private school and nursery scored above eight for satisfaction despite the price.

Therapy is becoming increasingly important for the wealthy, especially the young wealthy. Millionaires gave their therapists a high average rating of 8.3. Their average spend on therapy is $5,000 per year.

Almost half (43%) of millionaires under 40 use a therapist, compared to only 13% of millionaires over 50. The main benefits cited among therapist users were quality of care and impact, as well as kindness and personal connection.

“I think people under 40 are more proactive about their mental health and emotional health,” Bendtsen said.