Survey: Many Wealthy Invest From Heart
Emotions may be very powerful decision-influencers, but "feeling without judgment is a washy draught indeed," as the writer Charlotte Bronte put it. The relevance of this aphorism to the ultra wealthy is evidenced by the results of a new survey which shows that more than two-thirds (68%) of high-net-worth individuals have let their emotions get in the way of making the best investment decisions.

"Wealthy individuals are human too and their hearts can get the best of them just like anyone else," said David McLaughlin, senior managing director for the SEI Wealth Network, which conducted the study and is a business unit of SEI, a provider of outsourced asset management, investment processing and investment operations solutions based in Oaks, Pa. Research has shown that results suffer when emotion trumps intellect as the primary driver of investment decisions. "It's our job to balance that emotion with objectivity to help our clients make the best wealth management decisions for themselves and their families," McLaughlin said.

The "SEI Quick Poll" contains survey data  from 41 wealthy individual,s each with more than $5 million in investible assets. Despite the clear presence of emotion in the investment decision-making process, a resounding 83% of survey participants stated that the more objective factors of past experience or analysis influence them the most, with the remaining 17% allowing that their most dominant influencing factor is instinct.

When asked what most shaped their investing philosophy respondents gave mixed answers. Forty-six percent said their advisors; 22% cited their education; 20% said peers; and just 12% gave a nod to family. Participants were also split on how to measure success. Just over half (54%) said personal goal achievement is most important to them, while 46% said rate of return.

The data did show that there was little disagreement on where to obtain the most trusted investing information. The overwhelming majority of respondents (83%) consider industry professionals to be their number one source, while a small minority (17%) said the press.

For further information about the poll, e-mail [email protected] or go to

In other news ... 

Credit Suisse has released its first-quarter edition of the "Asset Management Alternatives Quarterly," described by the company as "a thought leadership series offering investors authoritative insight on economic trends and capital markets around the world." The quarterly, which spans a wide spectrum of asset classes and investment styles, features articles by Stefan Keitel, managing director and global CIO at Credit Suisse for Asset Management and the Private Bank, as well as contributions from Credit Suisse Asset Management's leading alternatives portfolio managers. Go to for further information.

The nation's largest defined benefit pension plans experienced asset increases of $6 billion and liability decreases of $35 billion in January, resulting in a $41 billion increase in pension funded status for the month and the second consecutive month of positive performance, according to the Milliman 100 Pension Funding Index, published by Milliman Inc., a global consulting and actuarial firm. For the last 12 months, these pensions experienced a $15 billion improvement in funded status, which compares favorably to the performance over the course of calendar year 2010, when these pensions saw the funded status deficit increase by $49 billion. Go to to view the complete update.

With art sales and prices in 2010 having reached historic highs (the first rise in three years), wealthy individuals are returning or turning for the first time to buying art as an alternative asset, according to the Financial Times, which noted that several banks are capitalizing on their clients' renewed demand for art investments by launching art portfolio funds, art lending services, and partnering with art advisory groups.

The Dow Jones Credit Suisse Hedge Fund Index ("Broad Index") for January was up 0.69%, with six out of ten sectors posting positive performance for the month, according to Credit Suisse Index Co. LCC. Convertible Arbitrage was the best performing sector, finishing up 2.16%. Positive performance was also seen in the "event driven" sector, which finished up 1.80%, with all three of its sub-indices posting positive performance. Go to for detailed information.

Venture capitalists from around the world invested $37.7 billion in 4,377 deals for companies based in the U.S., Europe, Canada, Israel, Mainland China, and India in 2010, according to Dow Jones VentureSource. This represents a 14% jump in investment but only a 2% increase in deal activity from 2009, when $33 billion was raised for 4,299 deals. Go to for further information.

Venture capital funding in the life sciences sector (which includes the biotech and medical device industries) fell steeply during the fourth quarter of 2010, according to a new PwC US report, "Taking a Tumble." Compared with the fourth quarter of 2009, venture funding decreased 42% in fourth quarter 2010 to $1.1 billion, a decline that marked the largest year-over-year decrease since the first quarter of 2009 and the lowest level of funding for the sector since the first quarter of 2003. Go to for a copy of the report.

Asset management, private equity and hedge fund executives expect growth over the next year to come from smaller Asian economies such as Hong Kong, Singapore and South Korea, according to a study commissioned by RBC Capital Markets, the corporate and investment banking arm of the Royal Bank of Canada, and conducted by the Economist Intelligence Unit. Asset managers are less optimistic about the U.S. equity markets (54% expect gains, versus 66% in the previous survey) and the dollar (53% expect a devaluation, versus 24% in the previous survey). Go to for further information.


The Rodman & Renshaw Annual China Investment Conference will be held March 6-8 at the Le Royal Meridien Hotel in Shanghai, China. Go to for further information.

The Raymond James 32nd Annual Institutional Investors Conference will be held March 6-9 at the J.W. Marriott Grande Lakes in Orlando, Fla. Go to "Conferences and Events" at for further information.

ROTH Capital Partners' 23rd Annual OC Growth Stock Conference will be held March 13-16 at The Ritz-Carlton, Laguna Niguel, in Dana Point, Calif. The event is designed to bring together investors with executives from more than 400 growth companies, including 100 from China. E-mail [email protected] for further information or go to

RioInvestment 2011 will be held March 22-24 at the Bolsa do Rio Convention Center in Rio de Janeiro. Go to at for further information.

The 6th China Offshore Summit will be held April 13-15 in Beijing. For information regarding the event, including speaker and sponsor/exhibitor opportunities, e-mail Michael Yuan at [email protected].

The 2nd Annual Capital G Private Wealth Conference will be held on May 4 at the Tucker's Point Hotel & Spa in Tucker's Town, Bermuda. For further information, go to

Longview Advisors' Annual 3D Collaboration & Interoperability Congress will be held May 23-25 in Denver, and will feature a special forum for executive management. Go to for further information.

On The Move

Barclays Wealth has hired Markus Stadlmann as managing director and head of discretionary investing. A former CIO of HQ Trust and member of the management committee of Harald Quandt Holding, one of the largest European multifamily offices, Stadlmann will be responsible for the performance of client assets invested in multi-asset portfolios and funds across Barclays Wealth Investment Management.

Trust Company of America, an independent RIA custodian based in Centennial, Colo., has added several financial services veterans to its sales team: Jeffrey Speight (Central South territory), formerly at Schwab Institutional; Kathleen Asack (Northeast territory), also from Schwab Institutional; Jim Collins (Great Lakes territory), previously at LPL Financial; and Melissa Gaustad (Heartland territory), previously at New York Life Insurance Co.

Oak Forest Investment Management Inc.
has merged into Highline Wealth Management, which manages $1 billion in assets for families and institutions. Jay Weinstein, former president of Oak Forest, has joined Highline as managing director. Both companies are based in Bethesda, Md.

Genworth Financial Wealth Management, a turnkey asset management provider, has added Altegris Advisors as an additional portfolio strategist specializing in alternative investments for Genworth's client accounts. Richmond, Va.-based Genworth Financial Inc., of which Genworth Financial Wealth Management is a subsidiary, purchased the Altegris Companies in late 2010.

Guggenheim Partners, a financial services firm with more than $100 billion in assets under supervision headquartered in Chicago and New York, has hired former Bear Stearns CEO Alan Schwartz as executive chairman. Just prior to joining Guggenheim, Schwartz was affiliated with Rothschild, Inc.

Arthur J. Gallagher & Co., an international insurance brokerage and risk management services firm headquartered in Itasca, Ill., has acquired James F. Reda & Associates LLC, an executive compensation and corporate governance consulting firm in New York City. Transaction terms were not disclosed.

Hefty Wealth Partners, an independent wealth management firm in Auburn, Ind., has appointed Mark O. VandeVelde as a wealth partner. VandeVelde previously served as an advisor at Chase Bank in Fort Wayne, Ind.

Tactical Allocation Group LLC, an RIA based in Birmingham, Mich., has appointed D. Scott Foret, a former senior consultant with TPI, as chief operating officer. Tactical has more than $1.3 billion in assets under advisement and specializes in portfolios built exclusively with asset class specific ETFs.

John Hancock Asset Management, a division of Manulife Asset Management, Toronto, has acquired the assets of Optique Capital Management, an RIA based in Milwaukee. The terms were not disclosed. Eight members of the former Optique team will be joining Manulife to form a new equity team based in Milwaukee.

Private Client Resources, a Wilton, Conn.-based firm that offers aggregation and reporting services for investors with assets that range from $20 million to over $1 billion, has hired Seth Bates as a manager of product development. Bates joined PCR after working for nine years at DataLan Corp., where he headed up the solutions delivery practice.

Inheriting Wisdom, a Chicago-based specialty consulting firm that designs legacy plans for families and provides training on legacy issues for their wealth advisors, has hired as a legacy planning consultant Cara Mossington, who previously worked at a Forbes 400 family office and Northern Trust.

First Republic Private Wealth Management, a provider of private banking and wealth management services headquartered in San Francisco, has appointed Michael Tinney, former senior vice president and investment manager for Wells Fargo's private bank, to its management team in Portland as portfolio manager and managing director. Lucas Newman was hired as portfolio manager and managing director.

Financial Architects Partners, a Boston-based firm that specializes in wealth transfer life insurance and the design, implementation and monitoring of large life insurance portfolios, has opened an office in Palo Alto, Calif. Ayako Sawanobori, former head of FAP's client service team in Boston, has relocated to become regional business manager at the new office, joined by Nina Luu in business development.

-Cort Smith