New Insights on Wealth and Worth Finds Investing in Health is as Important as Building Wealth
NEW YORK – The 2015 “U.S. Trust Insights on Wealth and Worth®” survey released today identifies what the wealthy consider to be important elements of a life well-lived, ranking health, family and financial security as essential. While the vast majority of respondents feel they are on the right path, eight in 10 identified at least one area of their lives, such as giving back and pursuing passions, that needs greater attention to make their life more fulfilling.
“A life well-lived shouldn’t be viewed through a rearview mirror with the final assessment of accomplishment or regret at the end of the journey. It can and should be carefully plotted and planned for,” said Keith Banks, president of U.S. Trust. “The wealthy are driven by a sense of purpose and desire to succeed, but what makes life fulfilling is not money; it’s what they do with it. As wealth managers, we have the opportunity to not only help our clients grow their wealth, but also to help them plan accordingly.”
The findings are based on a nationwide survey of 640 high net worth (HNW) individuals with at least $3 million in investable assets. “U.S. Trust Insights on Wealth and Worth” is among the largest annual studies to cover the attitudes and preferences of HNW individuals on growing, preserving and passing on wealth. The 2015 study builds on earlier explorations of financial security, giving back to the community, and family dynamics by taking an in-depth look at how priorities across all of these areas align with planning for a life well-lived.
Key findings include:
The wealthy are proactively investing in a multitude of activities to maintain their health and wellness, but many are not planning for the possibility of illness and how it might affect their income, assets or life expectations. The survey found:
Family and legacy
The study found that family clearly represents the greatest source of enjoyment in life and is the motivator for financial success and security. Leaving a financial legacy to the next generation ranks fifth in relative importance as a contributor to a life well-lived. The survey, however, found:
Financial security and building wealth
Survey respondents describe financial security as essential to a life well-lived because it provides options and the freedom to live life as they choose, without financial worries or restrictions. Their approach to investing and building wealth is shaped by their priorities and outlook, which in some cases is preventing progressing toward their wealth and investing goals.
HNW investors are slightly more optimistic in their outlook on the markets this year than last, but their views remain mixed, with millennials and women most uncertain and concerned about losses. While more than half (55 percent) of HNW investors say their greater priority is growth over protection of assets, 64 percent aren’t willing to seek higher returns if it means higher risk, and they are far more aware this year of the tax implications of their investment decisions. The survey found:
Most of the wealthy, and particularly younger HNW investors, either currently use or are interested in adding non-traditional assets to their investment portfolios, including private equity and venture funds (48 percent). Seven in 10 own or are interested in owning tangible investments such as land, real estate, oil and gas properties and timber, primarily to diversify the portfolios and source of risk and income. Yet, lack of understanding and perceived risk is holding back one in three HNW investors from these types of investments.
The role of planning and advice
“Insights on Wealth and Worth” found that a majority of the wealthy seek advice on one technical aspect of planning, such as portfolio performance, tax planning and estate planning. However, only about one-third of the wealthy are talking with an advisor about strategies around the goals they consider to be fundamentally more important, including identifying family needs and goals (36 percent) and planning for increased longevity (34 percent). Even fewer are having discussions about the strategic use of credit (21 percent), strategic philanthropy (18 percent) and investing for social impact (11 percent).
“Insights on Wealth and Worth” found that those people who are getting professional advice are farther along on measures they describe as essential to a fulfilling, meaningful life. Not only do they feel more financially security and are less conflicted by competing priorities, they are more likely to say their family has a healthy relationship with money and their actions are in greater alignment with their intentions when it comes to growing, preserving and passing on wealth and making a difference in the world.
The complete 2015 “U.S. Trust Insights on Wealth and Worth” survey findings can be found at http://www.ustrust.com/ust/pages/insights-on-wealth-and-worth-2015.aspx
The 2015 U.S. Trust Insights on Wealth and Worth® survey is based on a nationwide survey of 640 high net worth and ultra high net worth adults with at least $3 million in investable assets, not including the value of their primary residence. Respondents were equally divided among those who have between $3 million and $5 million, $5 million and $10 million, and $10 million or more in investable assets. The survey was conducted online by the independent research firm Phoenix Marketing International in January 2015. Asset information was self-reported by the respondent. Verification for respondent qualification occurred at the panel company, using algorithms in place to ensure consistency of information provided, and was confirmed with questions from the survey itself. All data have been tested for statistical significance at the 95 percent confidence level.
U.S. Trust, Bank of America Private Wealth Management is a leading private wealth management organization providing vast resources and customized solutions to help meet clients’ wealth structuring, investment management, banking and credit needs. Clients are served by teams of experienced advisors offering a range of financial services, including investment management, financial and succession planning, philanthropic and specialty asset management, family office services, custom credit solutions, financial administration and family trust stewardship.
U.S. Trust is part of the Global Wealth and Investment Management unit of Bank of America, N.A., which is a global leader in wealth management, private banking and retail brokerage. U.S. Trust employs more than 4,000 professionals and maintains 97 offices in 31 states.
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