Only 54 per cent of the investors polled said their advisor has helped them set goals and discuss risk, while little over a third said they have “effectively delivered on all three stages.”

“Investors have some newer, more compelling lower-cost alternatives available to them, including robo-advisors,” said said Mike Foy, director of the wealth management practice at JD Power. “In addition, with CRM2-mandated fee disclosures beginning to roll out, many investors will be learning for the first time exactly what they have been paying for. Advisors who aren’t adding value for their clients beyond asset allocation may be in real trouble.”

Other forces are also at play, the firm said, noting that besides technology and regulatory requirements wealth management firms are contending with changing investor demographics and psychographics.

For example, 42 per cent of Millennial investors are seeking a more active role in the management of their wealth than previous generations. These “validators” want to make their own decisions but still have access to an advisor for guidance. Meanwhile, older generations, such as Baby Boomers, are more likely to describe themselves as “collaborators” or “delegators,” and prefer to defer to their advisor’s judgments and decisions, according to the study.

“Wealth management firms and advisors must be cognizant of the increasing prevalence of the validator investor mindset and the challenges it presents,” Foy said. “It doesn’t necessarily mean advisors become less important, but the role they play for investors may be different. They can’t just manage portfolios – the best advisors of the future will need to be part coach, part teacher and part financial therapist.”

The study measured overall investor satisfaction with full-service investment firms and financial institutions that offer wealth management and private banking services in seven factors : financial advisor; account information; investment performance; product offerings; commissions and fees; website; and problem resolution. Satisfaction was calculated on a 1,000-point scale.