Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives. Dan Richards

When it comes to winning new clients, most advisors think they need to persuade prospects to replace their existing advisors.

But new research shows that an easier course of action is to persuade those prospects that they should supplement the advisor they are currently using. This is especially the case if you’re working with high net worth investors.

The trend to multiple advisors

 An August report from Boston-based Cerulli Associates showed that approximately a quarter of American households who seek financial advice used multiple advisors. For households with assets of $2 to $5 million, the percentage with multiple advisors was 33%. And of investors with assets over $5 million, 58% had multiple advisors.

One Cerulli analyst said: “Investors are taking the idea of diversification one step further and diversifying across firms and across advisors.”

The drive for multiple sources of advice has been fuelled by the financial crisis of the past three years. As Cerulli‘s analyst put it, “Today, fear is outweighing convenience.”  With that trend to multiple advisors, there is an increased push for quantitative measures of performance as well as a greater interest in understanding an advisor’s credentials, qualifications and knowledge level.

As a result of this shift, many advisors overestimate the extent to which they are a client’s primary advisor. When Cerulli surveyed advisors about a cross section of their clients, advisors indicated that they were the primary advisor 73% of the time; when those same clients were asked the question, only 34% said that advisor filled this roll.