CHICAGO, November 15, 2016 – With an average age of just 52 -- six years younger on average than in 2014 -- wealthy investors whose total household net worth exceeds $25 million are now significantly younger than less affluent investor groups, according to Spectrem Group’s recent report, The Wealthiest Americans.
Fifty-three percent of America’s wealthiest investors attribute a portion of their wealth to inheritance. This is a sure sign that the largest generational wealth transfer in American history is having an impact. Their confidence about the U.S. as the market with the world’s greatest investment potential has grown from just 16 percent in 2014 to fully a third (33 percent) today, with many indicating plans to invest in U.S. equity products and short-term products in the next 12 months.
Spectrem’s research indicates that one of the chief concerns of these wealthy investors is the impact their wealth will have on their children. More than half (56 percent) are worried that their children will be wasteful with inherited assets, and more than eight in ten (83 percent) are concerned that their wealth will negatively impact the educational or career plans of their heirs.
Thus, the demand for advisor programs that expose children or grandchildren to investment knowledge at a young age is high, with nearly 70 percent of those surveyed interested in such an offering.
Other key findings in the report include:
· Seventy-eight percent of investors under age 50 feel family-oriented concierge services from advisory firms are very important to them.
· Sixty-percent consider a return rate of 3 percent to 8.99 percent acceptable. Younger investors and those with assets of more than $125 million are more demanding, with 45 percent and 63 percent, respectively, expecting returns of 9 percent or more.
· Of the investors who have trusts, more than seven in ten (71 percent) have more than one, and almost half (50 percent) have more than two. The trust industry will continue to face challenges growing their business, as only 15 percent of $25 million plus investors will be utilizing a corporate trustee during their lives.
· China, the second most popular investment market among these investors, saw its attractiveness fall by 10 percent in the last two years, with just 16 percent of those surveyed in 2016 indicating they believe it is the country with the most potential for investments.
· Twitter and YouTube are far more popular among $25 million plus investors than those in lower wealth segments, with 39 percent and 45 percent of investors using the platforms, respectively.
“As the average age of the country’s wealthiest investors continues to decline, advisors should be mindful of the fact that this group is well under the traditional age of retirement, and has no plans to retire soon,” said Spectrem President George H. Walper, Jr. “Consequently, advisors should be focused on helping these clients sustain and grow their family’s wealth for decades to come.
At the same time, advisors should be offering educational programs for their client’s children, who are the most important factor considered when the ultra-wealthy make decisions about their finances.”
About Spectrem Group: Spectrem Group (www.spectrem.com) strategically analyzes its ongoing primary research with investors to assist financial providers and advisors in understanding the Voice of the Investor.