Affluent U.S. investors are increasingly using full-service brokers as their primary advisors, according to new research from consulting firm Spectrem Group.

The study found that nearly one third (31%) of affluent investors was using a full-service broker in 2005, a substantial increase from 24% the year before. This is a significant improvement for full-service brokers, who saw their share of the affluent market cut nearly in half from 2002 to 2004, it adds.

Affluent investors, defined as those with US$500,000 or more in investable assets, gave full-service brokers a commanding lead over other types of primary advisors in 2005. Full-service brokers ranked ahead of: investment advisors (17%), financial planners (14%), investment managers (10%), accountants (9%), discount/online brokers (7%), trust officers (2%) and private bankers (1%).

“Full-service brokers can breathe a little easier now. This segment had a tough couple of years through 2004, as affluent investors moved toward specialists like investment advisors, investment managers, accountants and private bankers,” said Catherine McBreen, managing director of Spectrem Group. “All told, between 2002 and 2004 full-service brokers lost nearly half of their market share as primary advisors to the affluent. So, last year’s improvement was sorely needed. Whether this improvement was due to the rollout of enhanced services or market performance, it is clear that full-service brokers need to continue working hard to meet affluent clients’ needs in 2006 and beyond.”

When asked about overall satisfaction with their primary advisors, full-service brokers (74%) ranked behind financial planners (86%), investment advisors (79%) and investment managers (78%) in combined “satisfied”/“very satisfied” responses.

Spectrem’s study is based on 1,014 qualified responses to a mail-based questionnaire sent out in September and October of 2005. The margin of error for the data is plus or minus 3.1 percentage points.