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Investors Shifting to Smaller Financial Asset Management Firms

NEW YORK, Wednesday, September 17, 2008 /PRNewswire/

With the collapse of Bear Sterns, Fannie Mae, Freddie Mac, and now Merrill Lynch and Lehman, trust in traditional investment firms has been shaken. A recent study shows investors shifting to small boutique financial asset management firms to minimize risk.

"Out of every crisis, an opportunity is born," says Michael Weiss, CEO of Frontier Financial Advisors. "Investors are moving their accounts from the large brokerage firms and banks to boutique financial asset management firms."

Over the last six months, an overwhelming majority of independent investment advisors have signed up discontented former brokerage firm clients, according to a study released in August by Schwab Institution.

Schwab’s semi-annual "Independent Advisor Outlook Study" for 2008 reports affluent investors turning to independent advisors and away from full-service financial asset management firms.

Rydex found the average RIA increased their client base by 7 percent in 2007, according to Rydex’s Advisor Benchmarking survey of 1,020 RIA firms. As a result, average RIA assets and net profits also hit all-time highs.

Meanwhile, news on Wall Street is grim. For the second time in 2008, investors' assets have been frozen.  In the week of February 11, 2008, the $330 billion dollar "Auction Rate Securities" market seemed to collapse overnight.
"Three factors led to the collapse and takeover of the country's oldest financial institutions," says Weiss. "First, greed and irresponsibility. Second, complex investment vehicles. Third, the problem of 'too:' too many conflicts of interest, too many egos and too much investor money piled into these financial asset management firms.
"The risk in the large financial asset management institutions has been increasing for years because the size of the firms pushed them to take more risk to increase earnings, at the expense of their customers.

"For the first time in years, the small boutique asset management firms are better positioned than the larger firms to serve the individual investor," said Weiss.

About Frontier Financial Advisors
One of Wall Street’s leading boutique financial asset management firms, Frontier Financial Advisors provides individual investors with investment strategies and technologies previously available only to the very wealthy.

Their free e-book exposes 57 investment mistakes: http://www.wallstreetfrontier.com

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