There are many factors that go into choosing an advisor, some objective, and some not-so-objective. Indeed, it’s at the introduction, several scientific studies contend, at which people make crucial intuitive judgments that can be hard to shake.
According to “Snap Judgments: Do First Visual Impressions Impact Financial Advisor Selection?”, a whitepaper by the Spectrem Group, while individuals primarily find their advisors through referral from a friend or family member, once the introductions are made, there are four factors they are most likely to consider before choosing to work with him or her:
- Honesty and trustworthiness (30%)
- Investment track record (17%)
- Fees or commissions charged (11%)
- Association with a well-known brand or company (10%)
The whitepaper looked at how affluent investors make snap judgments on choosing a financial advisor based solely on a group photograph of eight financial advisors (see below).
When shown the group photo of a diverse lineup of advisors, a plurality (though by no means a majority) of Mass Affluent investors selected the older white male (33%). The next largest percentage (23%) picked the middle-aged white male.
These non-millionaire investors were next most likely to gravitate toward the depicted female advisors: the young white female (13%) and the older and middle-aged white female (12% each).
According to Spectrem, the preference for older advisors suggests that individuals are seeking advisors perceived to have experience: Only 4% of surveyed Mass Affluent individuals selected the young white male, and just 2% selected the photos of a younger minority female and the middle-aged minority male.
Generational
There were generational differences. Mass Affluent Millennials ages 35 and under were the least likely across all age groups to select the photo of the older white make (24%), while the largest percentage (31%) opted for the photo of the middle-aged white male. These young investors were also more likely to select the photo of the young white female (21%).
Among seniors ages 65 and up:
- 39% — the largest percentage — selected the photo of the older white male; and
- 20% selected the photo of the middle-aged white male.
Baby Boomers (ages 55-64) were significantly more likely to select the photo of the older white male (34%), while 24% chose the middle-aged white male. This group was slightly more likely than all other Mass Affluent age segments to select the photo of the older white female (13%).
A near-equal percentage of Gen Xers ages 36-44 selected photos of the older white male (26%) and the middle-aged white male (24%). This group was slightly more likely than other Mass Affluent investors to select the photo of the middle-aged white female (14%).
Nearly one in five (19%) of so-called Self-Directed investors, who make their own financial and investment decisions, opted for the young white female.
Wealth
According to the report, across all wealth levels, the likelihood of choosing the older white male as a financial advisor based solely on their appearance in the group photograph tends to increase with net worth. One-third of Mass Affluent Millennials and Gen Xers would choose the older white male, compared with 41% of Ultra High Net Worth investors. To a lesser extent, the likelihood of selecting the young white female or the older white female based on their appearance in the photo decreases with net worth.
Women, as well as men, would be most likely to select the older white male in the group photograph as their financial advisor based solely on the photo, but a larger percentage of men would do so (39% versus 30% of women). One-fourth of surveyed Affluent men and women would be next most likely to select the middle-aged white male.
If men are more likely to choose the older white male, would women be more likely to choose an older white female as their financial advisor based only on their appearance in the group photograph? Yes, but the percentage is significantly lower (14% of women compared with just 5% of men).
All in all, Spectrem notes that prospective clients would be more likely to choose an older white man, and to a lesser extent, a young or middle-aged white woman, as their financial advisor simply by looking at a photograph. They are perceived to have the most experience and to be the most trustworthy.
