Blog: Good News!...and then the Bad


Since before the onset of the century, Spectrem Group has been determining the size of the wealth market at the end of each year. At the end of 2019, the number of Millionaires in the United States reach an all-time high of 11 million households. Not surprisingly all wealth segments reached their all-time high levels as well. The number of Mass Affluent households (those with $100,000 to $999,999 net worth) reached 31.8 million households. Ultra High Net Worth households (those with $5 million to $25 million net worth) includes 1.52 million households. And, at year-end, the number of households with more than $25 million was approximately 196,000. This information, and the revisions highlighted below, are available in our Market Insights 2020 report.

In the last few weeks, however, many affluent households have suffered a significant amount of loss to their net worth. In our recent research, The Corona Crash: What Financial Advisors Should Be Saying to Investors Now, investors remained somewhat positive. In fact, at that point in March, only 39 percent of investors indicated they had lost a fair or significant amount of their net worth while 42 percent indicated they had lost only a small amount of their net worth and 20 percent said they had not been impacted at all. This report will be updated mid-April and results compared against initial findings.

Spectrem has updated its year-end market size numbers based upon market closing information on March 20, 2020. As you can see below, the number of Millionaire households dropped from 11 million at year-end 2020 to 10.5 million as of March 20, 2020. The number of Mass Affluent households dropped from 31.8 million to 31.6 million and the Ultra High Net Worth households dropped from 1.52 to 1.44. Those in the $25 million plus category dropped from 196,000 to 178,000. 


Overall the drop in net worth hit those in the $5 million to $25 million range the most with an estimated loss of 11.2 percent. This market segment is represented by a significant number of retired households and therefore financial advisors should be reaching out to these investors immediately. Those in the $25 million net worth segment lost an average of 8.6 percent while the Millionaire segment ($1 million - $5 million) lost a projected 8.2 percent. These estimates are based upon the average portfolio makeup of the various wealth segments. Mass Affluent households lost an estimated 4.7 percent of overall net worth. Keep in mind that the investable assets of Mass Affluent households are generally a lower percentage of overall net worth than those of wealthier households. Additionally, any decline in real estate or other assets is not included in our calculations at this time.

The information above along with additional information regarding how investors want to communicate with advisors, the demographics of various market segments, the investment behaviors and attitudes of millennials and information on estate planning and whether investors are prepared is all included in our annual report Market Insights 2020 for just $49.95. You could also distribute this report among your staff or advisor network if you contact our office.

The overall message of this information is “keep communicating”. Investors understand that financial advisors are not responsible for the market decline and they are just searching for strategies to retain as much of their net worth as possible. Additionally, most feel positive that the markets will respond favorably after the current situation is behind us. 

Stay well, enjoy your home office if you are so confined, and keep communicating.