The Spectrem Group, a consulting firm (one which we hope doesn't consult on spelling matters), has just released an interesting report. It surveyed some 300 wealthy American households -- those with at least $5 million in "investable" assets -- and found that these folks favor independent financial advisors over the traditional full-service broker.

Here are some details:

  • About 30% of the rich use a full-service broker as their primary adviser, down from 41% two years ago.

  • Of those who use a primary advisor, just 27% percent rate him or her as "excellent."

  • Some 65% of respondents who use independent advisers report that they intentionally avoid advisers affiliated with brokerages, banks, and insurance or mutual fund companies.

  • About half of those who use independent advisers say they do so because they receive more objective advice.

This shift is easy to understand, when you think about all the recent scandals littering Wall Street. Spectrem's managing director Catherine McBreen noted that wealthy Americans have grown skeptical about their brokers' ability to be objective and to provide profitable results. As a result, they're increasingly turning to independent financial advisors.

This makes sense, since it's dangerous to have an advisor riddled with conflicts of interest -- such as earning commissions by getting you to invest in something that won't serve you well.

Now that you know what the ultra-rich are up to, you can join them! Consider using a discount brokerage instead of a traditional full-service account. Many reasonably priced brokerages these days offer plenty of services -- they're no longer bare-bones operations. Learn more in our Broker Center.

And look into getting some personalized independent financial planning advice for yourself, too. Learn more about how to find the right kind of advisor in our Advisor Center.