Financial Advisors Have the Most Power When it Comes to UHNW Investment Decision-making

New Study Shows the Influence That Financial Advisors Have on Ultra-High Net Worth Families in North America

New York —

Financial Advisors have a bigger role in investment decision-making for North American ultra-high net worth families than any other family member, group or committee, according to a new study from Morgan Stanley Private Wealth Management and Campden Wealth Research. 

The study among 59 individuals from families with net worth in excess of $25 million asked specifically how they made decisions about overall asset allocation, investing in a specific opportunity and divesting from a specific vehicle.  Respondents said these were most frequently decided by family advisors, family office executives and professional financial advisors. 

A professional financial advisor is used in 41% of cases for overall asset allocation, and a family advisor or family office executive in 38%.  These same non-family members also help make decisions about specific opportunities in 44% and 35% of cases respectively, and to divest in vehicles or companies 41% each of the time. 

How investment decisions are made within families

SOURCE: Morgan Stanley/Campden Wealth, Family Decision-Making 

“The fact that ultra-high net worth individuals appear to listen more to their financial advisors than their own family members shows the premium placed on good, professional investment advice,” said David Bokman, Head of Ultra-High Net Worth Resources for Morgan Stanley. 

The results are contained within the newly published ‘Family Decision-Making’ report, which examines decision-making within ultra-high net worth families in North America.  The influence of financial advisors is a recurring theme through the findings, but is particularly prevalent around investments. 

Asked how much influence key stakeholders inside and outside the family had on ultra-high net worths’ goals, 89% said their wealth advisors had either a strong (50%) influence or some (39%) influence.  This was higher than any other stakeholder, inside or outside the family. 

Family business strategy or partners and affiliates were the second-most influential entity (44% strong influence and 40% some influence).  Parents were a strong influence for a third of ultra-high net worth individuals and spouses for a quarter. 

Commenting on the findings, Dominic Samuelson, Chief Executive Officer, Campden Wealth said: “Financial Advisors play a very important role in family decision-making, and enjoy a special – and often very select – place at the table of these ultra-high net worth families.  In seeking to service them as best they can, Financial Advisors should look to gain as wide an understanding into families as possible and think about their complete needs.” 

“The more that Financial Advisors can understand, the more holistic advice they can offer, and the more families will gain from their interactions.  Financial Advisors may even wish to be explicit about their desire to gain more knowledge into the family from the outset to help fast-track this process,” added Mr. Bokman. 

To request a copy of the Family Decision-Making report, please contact research@campdenwealth.com

About Morgan Stanley

Morgan Stanley Private Wealth Management (PWM) is an established global leader in wealth management, dedicated to serving ultra high net worth individuals, families and their foundations. Founded in 1977, Morgan Stanley PWM has been committed to helping its clients preserve and grow their financial, family and social capital for over 30 years. 

Morgan Stanley Wealth Management, a global leader, provides access to a wide range of products and services to individuals, businesses and institutions, including brokerage and investment advisory services, financial and wealth planning, cash management and lending products and services, annuities and insurance, retirement and trust services.  

Morgan Stanley (NYSE: MS) is a leading global financial services firm providing investment   banking, securities, wealth management and investment management services.  With offices in more than 43 countries, the Firm's employees serve clients worldwide including corporations, governments, institutions and individuals.  For further information about Morgan Stanley, please visit www.morganstanley.com

About Campden Wealth

Campden Wealth is the leading independent provider of information, education and networking for generational family business owners and family offices globally in person, in print, via research and online. 

Campden Research supplies market insight on key sector issues for its client community and their advisors and suppliers.  Through in-depth studies and comprehensive methodologies, Campden Research provides unique and proprietary data and analysis based on primary sources. 

Campden Wealth also publishes the leading international business titles CampdenFB, aimed at members of family-owned companies in at least their second generation and CampdenFO, the international magazine for family offices and private wealth advisors.  Campden Wealth further enhanced its international reach and community in 2011 with the acquisition of the Institute for Private Investors (IPI), the leading membership network of private investors in the United States, founded in 1991 and with the establishment of Campden Family Connect PVT. Ltd a joint venture with the Patni Family in Mumbai, India in 2015. 

To learn more please visit campdenresearch.com. 

Media contacts: 

Campden Wealth:       
Stuart Rutherford
+44 (0) 20 3763 2806
stuartrutherford@campdenwealth.com 

Morgan Stanley:          
Christy Jockle 
914 225 6827
christine.jockle@morganstanley.com

Note to Editors 

About the study: The data examined in this study derive from a quantitative survey conducted from July to November 2015.  The survey was designed to elicit respondent attitudes and behaviors concerning investment decision-making as well as provide a clear understanding of current portfolio construction, decision-making and governance structures within the family.  The sample of respondents was derived from Campden Wealth’s existing community of ultra-high net worth individuals in North America. A total of 59 wealth holders engaged in the quantitative survey, with analysis and aggregation taking place in November and December 2015.  To add context to the quantitative component of the study, as well as to garner deeper insight into the ultra-high net worth investor mind-set, 15 in-depth qualitative interviews with wealth holders were conducted.  For the purposes of this study, ultra-high net worth is defined as coming from a family of net worth in excess of $35m.

Morgan Stanley Smith Barney LLC.  Member SIPC.                           CRC 1444208 3/2016