Even Super-Rich Can't Buy Happiness, Study Says
"The gratification of wealth is not found in mere possession or in lavish expenditure, but in its wise application," wrote Miguel de Cervantes, the Spanish novelist. This would seem to sum up the current state of many of the richest in this country, whose wealth-its application wise or otherwise-does not seem to be making them very happy, at least according an article written by Graeme Wood for the April issue of The Atlantic titled "Secret Fears of the Super-Rich."
Drawing from a recent study, the article says that these super-rich are "a generally dissatisfied lot," whose riches (averaging $78 million) have contributed to "deep anxieties involving love, work, and family." Many of the millionaires admitted to not feeling terribly financially secure. And one man went so far as to say that he wouldn't feel comfortable until he had $1 billion in the bank.
The data derives from "The Joys and Dilemmas of Wealth," a voluminous report-not yet available to the public-produced by the Center on Wealth and Philanthropy at Boston College, which granted The Atlantic early access to portions of their research. Some 165 households (120 reporting a minimum of $25 million in assets and two reporting more than $1 billion) completed a survey that asked them to share their feelings about how prosperity has shaped their lives and those of their children.
The Atlantic article runs through a litany of woes befalling the stupendously rich. For example, some survey respondents feel they have "lost the right to complain about anything, for fear of sounding-or being-ungrateful." Those with kids worry they'll become "trust-fund brats if their inheritances are too large-or will be forever resentful if those inheritances (or parts of them) are instead bequeathed to charity." Some of the respondents feel their relationships with people have become altered by or contingent upon their wealth, while for others the "novelty of money has worn off."
The article's focus on the "dilemmas" of wealth notwithstanding, there are "joys" to be had, and these are also described in the report, noted Paul Schervish, professor of sociology at Boston College and director of The Center on Wealth and Philanthropy, who with fellow colleagues and investigators John Havens and Robert Kenny produced the report. "It is a great privilege and source of happiness for the wealthy to have the ability to affect the wellbeing of the world," Schervish said, expressing the sentiment of many of the super-rich. "Their is joy in the ability to carry out for others like you would carry out for yourself, your family, your loved ones. To identify with the fate of others as if that fate were your own-and be able to do something about it. This is fulfilling for the person who is the recipient of that support, as well as for the person providing it." His advice to financial advisors with clients who are philanthropically inclined? "One of the best things to do is be curious about their interests and areas of concern."
To read The Atlantic article online go here. For more information about the study, go to www.bc.edu/research/cwp.
In other news ...
GenSpring Family Offices, Palm Beach, Fla., a wealth management firm for ultra-high-net-worth families, has launched its latest international research study, "Sustaining the Family Enterprise: Understanding the Impact of Entrepreneurial Orientation and Governance Practices." Expanding on a 2009 pilot study on family enterprises and conducted in collaboration with the University of North Carolina at Greensboro and the Family Firm Institute, the report focuses on the governance practices and policies as well as the entrepreneurial orientation of the family enterprise-core elements, say the researchers, that are critical to sustaining the family business for multiple generations. To learn more about the study, including how you can participate, contact Kirby Rosplock at [email protected] or go to www.GenSpring.com.
Custodial bank Northern Trust has made a deal to buy Citadel's fund administration business, Omnium, according to a report posted by HFN (www.hedgefund.net) on March 25. Northern Trust has some $93 billion in hedge fund and funds-of-funds assets under administration, while Citadel has $25 billion in AUA for the same types of funds, said HFN. The add-on effect of Omnium's AUA reportedly would push Chicago-based Northern Trust into the top ranks of hedge fund administration services.
India has registered tremendous growth in terms of its wealth population, to which has been added a relatively new and growing class of ultra-high-net-worth individuals, according to recent data from MarketsandMarkets, a global market research and consulting company based in the U.S. At the same time, the number of Indian family offices has also grown, and is expected to reach 940 by 2015. According to M&M, the Indian wealth market provides huge opportunity in terms of the current low penetration (20%) of UHNWIs, as well as the vast amount of intergenerational transfers expected in the coming decade-an amount estimated to be around 5.78 lakh crore ($128 billion). Go to www.marketsandmarkets.com for the full report.
The New Cities Foundation, a newly launched Geneva-based non-profit that brings together decision-makers from the private, public, research, and non-profit sectors to work on new models of collaboration to improve life and work in the 21st century city (with a focus on fast-urbanizing countries in Asia, the Middle East, South America and Africa), will be gathering for the foundation's flagship conference scheduled to take place in an Asian city in late 2011 or early 2012. The foundation's first founding members are GE, Cisco and Ericsson; members include global leaders such as Orange (France Telecom), GDF Suez, New York University's Wagner School as well as the Gateway House think-tank in India. For membership, conference, and general information go to www.newcitiesfoundation.org.
The Morningstar 1000 Hedge Fund Index, a composite of the largest hedge funds in Morningstar's database, rose 1.5% in February, experiencing the second consecutive month of net outflows. Also in February the currency-hedged Morningstar MSCI Hedge Fund Index grew 1.2%. The index, which also details asset flows through January, showed in that month that convertible arbitrage and U.S. equity hedge funds saw significant outflows of $734 million and $2.6 billion, respectively, and funds of hedge funds saw outflows of $630 million. Go to the Morningstar Alternative Investment Center at www.altinvest.com for further information.
Private equity is poised for a comeback in 2011, with increased optimism for a steady revival of deal, fundraising and exit activity, although a fragile economy and credit market hangover could derail PE's recovery. All this according to the "Global Private Equity 2011 Report" recently released by Bain & Company, an advisor to the PE industry. For a copy of the report contact Cheryl Krauss at [email protected] or call +1 646-562-7863.
Convergence Inc. (www.cnvg.org), a Washington, DC-based nonprofit that brings together key stakeholders with divergent points of view to find creative yet practical solutions to national problems ranging from the diabetes epidemic to U.S.-Muslim relations, has received a $200,000 gift from MajorDonors.com, which assists nonprofits with annual operating budgets in the $250,000 to $5 million range. For information on how to get involved go to www.majordonors.com.
Events
The Lauder Institute at the Wharton School of the University of Pennsylvania will host a conference, Global Risk: New Perspectives and Opportunities, on April 7-8. The event brings together scholars (financial, political, etc.) from around the world to analyze the problems stemming from the global financial crisis and opportunities inherent in a recovering global economy. Go to www.regonline.com/globaltrendlab for further information.
The International Association of Advisors in Philanthropy (AiP) will host its annual Conference on Philanthropy 2011 at the InterContinental Chicago O'Hare Airport Hotel in Rosemont, Ill., on April 27-29. This year's event features keynoter and author Peter Karoff, founder of The Philanthropic Initiative. Go to www.advisorsinphilanthropy.org for further information.
Jack Welch, former CEO at General Electric, will host a management program for senior executives on April 28-29 at the Four Seasons resort in Palm Beach, Fla. For information go to event sponsor HSM Americas Inc. at us.hsmglobal.com.
KeyBank in Cleveland has released its 2011 Key4Women Forum schedule. The forums are designed to educate and empower women in business, including non-profit directors, through the advice of a dynamic national speaker. This year, leadership expert Cindy Solomon will present "Creating a Culture of Courage: The New Leadership Challenge" at the Forum in 14 cities, beginning on May 5 in Cleveland. For the full schedule and registration information, go to www.key.com/womensforum.
Ata Invest's inaugural Turkish Equities Conference will be held May 15-17 in Istanbul at the Four Seasons Hotel: Istanbul at the Bosphorus. The event will provide investors with a picture of Turkey's investment potential in the coming decade, according to organizers. Go to www.atainvest.com/Conference/IstanbulMay2011 for further information.
The League of Black Women's 8th Global Strategic Leadership Conference, "Black Women 2011: New World Power," a forum for top-ranking professional black women in the U.S. and abroad, will be held May 17-20 at the Innisbrook Resort and Golf Club (owned by America's first black female billionaire, Sheila Johnson) in Tampa, Fla. Go to events.leagueofblackwomen.org for further information.
The Los Angeles-based investment bank B. Riley & Co. LLC will hold its 12th Annual Investor Conference on May 23-25 in Santa Monica, Calif. As an added feature for conference attendees, special guests and foundation donors, the bank will co-host with the Sugar Ray Leonard Foundation a charity boxing event. Go to www.brileyco.com for further information.
On The Move
Fidelity Investments of Boston has appointed Brian B. Conroy, former head of global equity trading for Fidelity Management & Research Company, as president of Fidelity Capital Markets, the company's investment advisor. Mark A. Haggerty, former president of Fidelity Capital Markets, has been named head of a new product development organization that spans across Fidelity's institutional businesses. In his new role Haggerty will be responsible for developing wealth management products for Fidelity's institutional and intermediary clients, including RIAs and family offices.
Whittier Trust Company, a wealth management firm headquartered in Pasadena, Calif., has hired Peter J. Zarifes, former managing director at Bessemer Trust, as a senior vice president and member of the executive committee. Whittier has more than $8 billion under advisement, and serves more than 270 high-net-worth families and 30 foundations throughout the U.S.
Baird has hired Jason Schlesinger, a former financial advisor with Wells Fargo and Bank of America Investment Services, as director of the firm's new San Francisco wealth management office. Baird has also added Stephanie Wong, also previously at Wells Fargo and Bank of America Investment Services, as a registered client relationship specialist.
Harris Private Bank, which serves high-net-worth clients, has appointed Kent Anderson to the position of senior private banker in the wealth manager's Naples, Fla., region. Andersen most recently served at U.S. Trust in Naples, where he was senior vice president, private client manager, and at Northern Trust, Bank of America, Huntington Private Bank, and Continental Illinois National Bank in Chicago.
Jackson National Life Distributors LLC, the sales and marketing arm of Jackson National Life Insurance Company, Lansing, Mich., has promoted Alison Reed to senior vice president of product and investment management. Reed previously served as JNLD's vice president of variable annuity product management, and before that as vice president of due diligence for National Planning Holdings Inc.
U.S. Bank Wealth Management has appointed Daniel J. Rauchle as head of investment management for the company's ultra-high-net-worth group. Previously, Rauchle was president of Wells Fargo Alternative Asset Management LLC, a subsidiary of Wells Fargo & Co. which he founded. He was also head of the Wells Fargo Family Wealth Alternative Investment Group and served as chairman of both the WFAAM Investment Advisory Board and WFAAM's SEC-registered funds board.
First Republic Bank, a provider of private banking, private business banking and wealth management services based in San Francisco, has hired Christine Gorelick, a former senior private banker at Wells Fargo Bank, as managing director in First Republic's office in St. Helena, Calif.
U.S. Trust has appointment five senior wealth managers in the company's West, Central, and East divisions. Hired as senior vice presidents and private client advisors are: Therese Murphy Firestone, San Francisco; Michelle Castano Garcia, Portland, Ore.; Joel Petersen, Seattle; and Belinda Phelps, Houston. Lloyd Conley Jr. joined as a senior vice president and senior trust officer in Richmond, Va.
-Cort Smith