Canadian millionaires seek out financial advisors that are well educated, highly qualified and experts in their field, according to recent research from Taddingstone Consulting Group.

The research suggests that millionaires seem to be gradually shifting their business to specialist advisors that have changed the focus of their business to reflect the demands of their clients.

Millionaires are also continuing to favour alternative banks that offer attractive savings rates, as well as alternative investment opportunities represented by private equity and jedge funds, Taddingstone says.

These findings are contained in The 2005 Taddingstone Canadian Millionaire Report — a study of Canadian Millionaires and their financial advisors — that will be released this week.

“With the pace of growth of financial advisors likely exceeding the growth of new millionaires, financial institutions, like their clients, would be wise to demand exacting technical skills and ongoing training for their advisors.” says Keith Sjogren, leader of the wealth management practice at Taddingstone. “Those advisors that are viewed as specialists in their field, or who work seamlessly with a team of specialists, are most likely to be successful with the millionaire community. The days of the ambitious generalist with minimum qualifications are all but over.”

The report also suggests that the personal and intellectual qualities of individual advisors have a far greater influence over the relationship than the brand of the financial institution. “Financial institutions that focus on the wealthy need to demonstrate the unique value that they create for clients which extends beyond the individual advisor.” says Sjogren.

“The 2005 Report did show that, overall, millionaires are more satisfied with their financial advisors than they have been in the last five years,” adds Keith. “While a sound economy and positive capital markets account for some of this, advisors are clearly recognizing that relationship management and asset management go hand-in-hand.”

Canadian millionaires are placing increasing importance on such issues as estate and succession planning. However, they are not confident that their primary financial advisor is capable of advising them on all aspects of wealth transfer. The report suggests that a growing opportunity exists for the trust industry to align itself with other core elements of the wealth management industry.

In keeping with the aging of the millionaire population, there was also a notable shift towards a more conservative investment stance. “They are now more likely to want to work with risk managers not risk takers” says Sjogren.

One of the most contentious issues to arise in Taddingstone’s research over the past five years has been fees paid to financial advisors. In the 2005 report, fees, along with portfolio performance, were shown as becoming more important in affecting the overall satisfaction of advisor/client relationships. Millionaires are questioning whether or not they are receiving full value for the fees paid, and the desire to link fees paid to investment performance remains strong.

However, despite the strong opinions on fees, the 2005 report shows that the report shows less than half of the respondents actually track the fees they are paying their wealth managers.

Taddingstone Consulting Group is a strategy consulting firm advising financial institutions and wealth managers across North America in the areas of retail and small business banking and wealth management.