Many problems simply do not exist for wealthy people. But that does not mean all problems disappear when a person has ample assets.
Health, occupation and the fortunes of offspring occupy the minds of some extremely affluent investors, and one of the factors determining the level of concern is the age of the investor.
Spectrem’s wealth segmentation series study Financial Behaviors and the Investor’s Mindset investigates the personal concerns of wealthy investors to determine what personal matters weigh upon them.
Among Ultra High Net Worth investors with a net worth between $5 million and $25 million, 53 percent express concern over the health of their spouse (only 46 percent express concern about their own health). It makes sense that older investors would be more inclined to be concerned about the health of their spouse, and in fact, 61 percent of UHNW investors over the age of 71 express that concern, while only 50 percent of Millennials and Gen X investors (under the age of 52) are currently worried about the health of a spouse.
But, as investors get older, their concern on different topics is altered. Where young investors do not usually have concerns about their own health, the pressures on older investors goes beyond retirement matters.
Among Ultra High Net Worth investors with a net worth between $5 million and $25 million, there has been a 6 percent decrease in the concern over the health of a spouse from 2016 to 2017. Still, it is the greatest concern of the wealth segment.
The UHNW segment skews slightly older, and 67 percent of the oldest UHNW investors report concern over their spouse’s health.
In the case of Millionaires with a net worth between $1 million and $5 million, 53 percent worry about their own health, and 50 percent of UHNW investors do so. That is also widely varied based on age.
Outside of the health arena, 53 percent of Millionaires are concerned about maintaining their current financial situation. That is a much higher percentage than what was reported from UHNW investors (44 percent).
The difference related to age regarding the current financial situation follows the difference related to health. Only 41 percent of Millennial Millionaires are worried about staying where they are financially, while 56 percent of the World War II investors have that concern.
Among UHNW investors, the concern over finances is lower overall (43 percent) but is actually higher among the younger investors (50 percent among Millennials and Gen X investors).
One responsivity which weight upon investors of all ages is taking care of aging parents. Exactly 50 percent of Millionaires and 41 percent of UHNW investors express that worry.
Obviously, UHNW investors are going to have less concern over financial matters than Millionaires, but there is one area in which the UHNW concern level is equal to that of those less wealthy. Fifty percent of UHNW investors are concerned about spending their final years in a care facility, while 51 percent of Millionaires feel the same way. The UHNW concern was identical between age segments and only Millennials (at 29 percent) were well below the 50 percent mark regarding the matter of how they are going to spend their final years.
“It is common sense that investors of different ages will have different concerns, but advisors should recognize the personal concerns of clients initially while realizing that those concerns can change over time,’’ said Spectrem president George H. Walper Jr. “These changes don’t just occur on milestone birthdays; advisors should keep abreast of clients’ personal lives and events to track how financial advice needs might change based on personal matters.”
Top Takeaways for Advisors
Advisors must know what personal pressures beyond finances are weighing upon the minds of clients if t hose concerns have any financial bearing at all. The health issues, for example, can affect the way an investor looks to the future, forcing them to pay more attention to immediate financial needs than far-reaching ones.
Likewise, if the concerns expressed deal with the investor’s own health future, with an emphasis on the possibility of living in a care facility someday, advisors must prepare information that could alleviate the financial concerns related to advanced age care.
©2017 Spectrem Group