HNW Clients Mum On Financial Goals, Survey Says
Most high-net-worth individuals feel it is important for their advisors to know all their goals and financial wishes, but only a small percentage actually provide that information, according to a new survey.
The disconnect can lead to incomplete or ineffective advice, according to a survey released by SEI, an international provider of investment processing, fund processing and investment management business outsourcing.
According to the survey, 67% of those with $5 million or more in investable assets feel it is very important that their advisors know all their goals, but only 26% feel their advisors actually have that in-depth knowledge.
Phoenix Capital Research questioned 100 individuals for the survey.
The poll suggests that despite a growing awareness of behavioral finance in recent years, a disconnect remains between the wealthy individual and their advisors when it comes to articulating and measuring against financial and personal goals, SEI says.
The survey shows 20% of the wealthy say their financial goals are known only to themselves. Only 31% say their advisor knows about their financial goals and an even smaller group (19%) says their advisor knows their goals and measures against them.
"Our industry has been talking for years about the importance of both financial and personal goals, but, as this poll shows, the wealth management conversation still centers on risk tolerance or portfolio objectives for too many people," said Michael Farrell, managing director for SEI Private Wealth Management. "It's time to end the financial 'don't ask, don't tell' and begin meaningful conversations between advisors and clients about what's truly important."
-Karen DeMasters
Wealthy Investors Avoid U.S. Equities
Ultra-high-net-worth investors are turning away from the U.S. stock market and increasing their investments in alternatives, including commodities and real estate, according to the Institute for Private Investors.
However, they also are a little more optimistic about the returns for the S&P 500 for the coming year, according to a survey of the 1,100 ultra-high-net-worth investors who make up the IPI.
IPI, an educational and networking resource for wealthy investors, includes 345 private families with a minimum of $30 million in investable assets, 40% of whom have at least $200 million or more. Of this group, 48% say they are going to increase their allocation to commodities and 45% say they will increase their investment in real estate, according to the IPI annual Family Performance Tracking survey.
Continuing a trend from last year, 44% say they will increase their holdings in global equities, while 36% say they will decrease their holdings in cash.
Private companies also are popular among the very rich and 55% say they will increase direct investments in them. They also favor tangible assets like gold, land and artwork, as well as commercial and residential real estate.
At the same time, they anticipate a better year for the S&P 500, with a predicted return of 6.4% for 2012 compared to 2.1% for 2011.
"The common refrain we're hearing from investors this year is that they're decreasing exposure to public markets and relying less on financial instruments and trading strategies," said Charlotte Beyer, IPI founder and CEO. "Many investors are continuing to position themselves defensively."
Mindy Rosenthal, IPI executive director, added, "More investors said they're backing real companies with real businesses, including start-ups, and doing so globally."
-Karen DeMasters
On The Move
Concert Global Group has announced that Cheryl Wong has joined Concert's private wealth group as a financial advisor and business development officer. She will be advising high-net-worth clients and businesses, as well as securing and coordinating legal and accounting counsel for clients. Prior to joining Concert, Wong was a vice president and financial advisor at Comerica Securities.
BNY Mellon's wealth management business announced two appointments. Alexi Giannoulias, a former Illinois State treasurer and current adjunct professor at Northwestern University, has been hired as senior advisor for strategic relationships. Giannoulias will be responsible for business development for the Chicago wealth management office and for strengthening the company's client relationships with government entities across the U.S. Andy Paterson has been promoted from managing director to president for the firm's central region. Based in Pittsburgh, Paterson will be responsible for portfolio management, banking and new business development in the region.
-Kathy Lynch