As part of its annual Market Insights Report, Spectrem explored the factors that drive wealthy investors’ decision to change their advisors and their propensity to make referrals, among other areas.

Over half of wealthy investors recently polled by Spectem have switched advisors at least once, with the largest percentage (24 per cent) attributing their decision to a lack of a proactive contact.

Closely following this was that their advisor “did not provide me with good ideas and advice” and “was under-performing compared to the overall stock market,” cited by 23 per cent and 22 per cent respectively.

High fees and expenses, and not wanting to follow their advisor to a new firm, were both flagged as main reasons by 16 per cent of respondents.

Other switching catalysts were: 13 per cent said their advisor simply retired or stopped working, so they had to find a new one; 12 per cent said their advisor was slow at returning phone calls; 10 per cent said they moved to a new location and wanted a new advisor that was closer to them; 8 per cent their advisor was “constantly trying to sell me products but not offer me good advice;” 6 per cent said they liked their advisor, but not the firm they were working with; 4 per cent said their advisor was slow at replying to emails; and 3 per cent said their advisor merged with another firm that they didn't like.

The findings are part of Spectrem's annual Market Insights Report, which polled 4,500 mass affluent investors, 5,000 millionaire households, 2,000 ultra high net worth investors and 196 $25 million-plus investors.

Among other areas of focus, the report looked at investors' tendency to refer their advisor to friends or family members. Across mass affluent, millionare and UHNW investors, over half have indeed referred their advisor in the past, with UHNWIs more likely to have done so, according to the findings. Meanwhile, after leaving their current advisor, the majority of investors said they didn't know their new advisor previously, while over a third said they found their new advisor through a referral.

The fact that only a third said they found their new advisor through a referral may seem surprisingly low to some, given that referrals have been regarded as a key part of the client acquisition process in wealth management. As highlighted by SEI previously, however, referrals are triggered by circumstances and financial behaviors, and these are also influenced by traits such as a client’s age and past experiences.

Almost half of those polled by the research firm in September 2015 said they tend not to refer their friends and family to their preferred service providers or businesses because they “do not feel it is their place to tell others where to go or what to buy.” Around a third said they simply don’t think about referring others and just under 20 per cent “don’t want to seem pushy.”