August 14, 2008, Press Release
IN UNCERTAIN TIMES, WEALTHIEST AMERICANS TURN TO ADVISORS FOR HELP
Ultra High Net Worth Investors Who Regularly Consult Advisors Up 71% From 2006
Those Who Consider Themselves Self-Directed Down 42%
CHICAGO, August 14, 2008 – Faced with volatile markets and a significant economic slowdown, the nation’s wealthiest investors are increasingly embracing financial advisors for help with their investment decisions.
More than one-third (36%) of investors with a net worth between $5 million and $25 million, not including primary residence (NIPR), currently identify themselves as “advisor-assisted.” This represents an increase of 71% from 2006, when that number stood at 21%, according to a new Spectrem Group report, “Ultra High Net Worth Investor 2008,” released today.
At the same time, the number of Ultra High Net Worth investors who define themselves as “self-directed” stands at 15%, down from 26% two years ago. This represents a decline of 42%.
“In a highly complex market environment, Ultra High Net Worth investors are increasingly seeking professional advice rather than going it alone. Having not fared well investing on a more self-directed basis during the last downturn, these wealthiest U.S. investors are less confident and proceeding with caution this time around. The number who regularly consult with advisors to navigate the financial markets has nearly doubled, while far fewer continue to make their investment decisions independently,” said George H. Walper, Jr., President of Spectrem Group and co-author with Spectrem Managing Director Catherine S. McBreen of the new book “Get Rich, Stay Rich, Pass It On: The Wealth-Accumulation Secrets of America's Richest Families” (Portfolio, January 2008).
Further underscoring this point, just 25% of Ultra High Net Worth investors feel they can do a better job of financial planning than an advisor.
The Spectrem report, “Ultra High Net Worth Investor 2008,” is based on a survey conducted in June 2008 of more than 500 Ultra High Net Worth investors, defined as having a net worth between $5 million and $25 million, not including primary residence (NIPR). The data have a margin of error of plus or minus 4.3 percentage points. Advisor-assisted investors are defined as those who regularly consult advisors but make most of the final decisions. Self-directed investors make most of their own decisions without the assistance of an advisor.
About Spectrem Group
Spectrem Group is a strategic consulting firm specializing in the affluent and retirement markets. It integrates proprietary research with expertise in building business, marketing and M&A strategies. Spectrem professionals have held senior management positions at leading global companies. Through a collaborative process, they create and implement practical and profitable strategies that fit the cultures of client firms.
