The nation's population of millionaires-a demographic that has undergone robust growth in recent years-has dwindled in size for the first time since the bear market of 2000-2003, according to a new survey.
A new survey by Spectrem Group shows that the number of households with a net worth of $1 million or more, not including primary residence, fell 27% in 2008, from a record 9.2 million households in 2007 to 6.7 million.
That marks the first time since 2002 that the U.S. millionaire population has shrunk from one year to another, according to Spectrem.
The reduced numbers were primarily due to the recession and the falling value of a broad range of assets and investments, and touched upon virtually all ranges of wealth, according to Spectrem.
The number of ultra-high-net-worth households, those with a net worth of $5 million or more, also dropped 28%, to 840,000 in 2008, according to the survey. Affluent households, the group made up of those with $500,000 or more in net worth, declined 28%, to 11.3 million in 2008.
The decreasing population of millionaires could have an impact on financial advisors and the wealth management industry, which in recent years have experienced significant growth as the upper tier of the nation's wealth has swelled.
While the drop in the number of rich households is not a surprise considering the state of the economy, the shrinking pool of wealthy Americans won't help in the nation's attempt at a recovery, said Spectrem President George Walper Jr.
He notes that many of the nation's millionaires are entrepreneurs, small business owners and corporate executives-a group that will play a vital part in driving an economic recovery.
"Those population groups are the ones that create jobs in the country," Walper notes. "When they see their value and their businesses' value drop, these folks are not going to be spending much and not going to be creating jobs."
The survey is based on information taken from 3,000 affluent households throughout 2008, according to Spectrem.