The first Friday at the start of each month is a day that the whole nation focuses on as if it were the Super Bowl. Financial professionals have long been fixated on rotating economic statistics du jour, whether it's the money supply, consumer spending or the savings rate.

But clients' laser-like focus today on the monthly unemployment figures, a legacy of the Great Recession, is something altogether different, according to George Walper, president of Spectrem Group, who spoke at the second Forum on Innovation and Growth In A Post-Economic Crisis Era. What clients fear is a prolonged economic downturn characterized by long-term unemployment that spawns unhealthy fissures in society.
After six months in late 2008 and early 2009 that saw more than 500,000 people lose their jobs and left 15 million Americans out of work, this obsession is understandable. It cuts across all income and, in fact, rises with wealth levels in certain cases.

Both wealthy and ultra-HNW investors assign far greater importance to employment levels than they do the level of the stock market. When asked what they viewed as an indicator that the economy was improving, the responses were striking.

Would the Dow Jones Industrial Average staying consistently above 10,000 reveal a better economy? For the mass affluent, folks with less than $1 million, 45% said yes. But among millionaires with $1 million to $5 million, only 23% said yes. The ultra-HNW crowd was slightly more sensitive to the equity market, with 30% saying a sustained Dow above 10,000 would signal an improving economy.

Compare that to investors' attitude toward a future drop in the unemployment rate. Among the mass affluent, 70% cited job growth as the most significant indicator that the economy was improving. That figure climbs to 76% for millionaires and 78% for ultra-HNW investors. Perversely, the less one needs to work the greater the significance they attach to unemployment.

Wealthy clients may be financially independent or secure in their own jobs, but they still have friends, children and grandchildren they worry about, Walper said. For most of the investors Spectrem surveyed, an improvement in the economy meant an unemployment rate of 7% or lower.
Their concern about a prolonged economic downturn, which worries 79% of millionaires, is directly related to their second-biggest fear, the financial situation of their children and grandchildren. This bothers 66% of millionaires and 71% of ultra-HNW investors.

What's striking is that these well-heeled folks no longer fear for their own jobs. Fear of job loss for them or their spouses only worries 30% of millionaires and 17% of the ultra-HNW crowd. But their engagement with the rest of society still makes the jobs situation a problem of paramount importance.

Other key issues include the prospect of inflation, maintaining their current financial position, the health of their family, having enough money in retirement (52% of the ultras with more than $5 million worry about this), and financing their children or grandchildren's education.

Whatever one thinks of the recently enacted health-care bill, the yearlong national debate over it has prompted a lot more thinking and introspection over the subject.  Walper noted that it is sparking conversations among investors and advisors and among family members and friends alike.

Anger toward advisors has dissipated over the last year, he added. But that doesn't mean that clients haven't changed.

Even though many investors have recouped most of their losses, most remain scarred psychologically by the financial crisis. Although they want to work with advisors, they want far more involvement than they did before the collapse of Lehman.

"Investors expect so much more from their advisors," Walper said. "The bar is way up from 2008."

Justified or not, clients' perception of their own investing abilities is rising as well. Whether it is because their advisor didn't see the crisis coming-only Nouriel Roubini, John Paulson and a handful of others did-or whether they are reasoning that they, too, could lose only 35% of their portfolio isn't clear. Whatever the reason, clients may be interested in growing their assets, but they are more eager to protect their financial positions, and they may not always see the conflict between the two goals.

Moreover, clients expect their phone calls to be returned within three hours, seven days a week. "When a business owner sends an e-mail on a Sunday morning, they expect a return phone call on Sunday. In 2005, you could return it on Monday," Walper remarked.

Physicians who might take a day to return a phone call from a patient think three hours is a long time to wait for their advisor to call back. The good news for advisors is that if they remain highly responsive to clients, satisfaction levels can surge to the 96% to 99% area.

Unfortunately, a huge gap remains between perception and reality when it comes to how advisors and clients view each other. "The disconnect between what advisors think of advisors and what clients think of them is like the U.S. and China," Walper explained.

With many individuals' portfolios recovering to acceptable levels, clients are focused on their own personal issues. "Investment-oriented advisors think clients want to know why they bought Intel and sold IBM," Walper said. "Clients want to know why they can't pay for their grandchildren's education to the extent they thought they could."

If clients' attitudes toward their advisors have improved, their attitudes toward Wall Street have not. "Wall Street is not perceived as trustworthy," Walper said. "It will take a while for the sting to go away."

Moreover, emotions surrounding the current political climate are intense. One conference participant, Mark Balasa of Balasa Dinverno & Foltz in Itasca, Ill., told attendees that clients' interest in what's happening in Washington reminds him of the way they usually feel during the fall of a presidential election year. Whether the client is a Republican or Democrat, they are watching Washington with a keen eye.

Another factor driving clients to distraction is the 24-hour news cycle. Doug Lockwood, a principal at Harbor Lights Financial Group in Manasquan, N.J., recalled getting dozens of phone calls one day after CNBC's Jim Cramer screamed at his Mad Money viewers to sell everything. "They were not the $5 million [in assets] clients," Lockwood quickly added.